Public, private pandemic insurance legislation reintroduced
Originally introduced in May 2020, the bill would establish a TRIA-like program for future pandemics.
On Nov 2., 2021, the second iteration of the Pandemic Risk Insurance Act, which would establish a federal backstop for pandemic risk, was introduced by Rep. Carolyn Maloney, D-N.Y.,
The Pandemic Risk Insurance Act of 2021 (PRIA), H.R. 7011, would establish the Pandemic Risk Reinsurance Program that would create a system of shared public and private compensation for business insurance losses resulting from future pandemics or public health emergencies.
The program would ensure that there is sufficient capacity to cover these losses and protect the economy in case of a resurgence of COVID-19 or potential future pandemics. Rep. Maloney originally introduced this legislation in May of 2020 in the midst of and in response to the COVID-19 pandemic.
Similar to the Terrorism Risk Insurance Act, in PRIA the federal government would help to maintain marketplace stability and to share the burden alongside the private insurance industry.
Congresswoman Maloney made a statement remarking that “[t]here is a broad consensus that we need a program like the one created by PRIA — to provide business owners and our economy with better stability in the event of any future pandemics.”
PRIA will require insurers to make sure all of their property and casualty insurance policies include coverage for insured losses due to covered public health emergencies. The bill will also require insurers to make parametric non-damage business interruption insurance coverage available in their commercial property insurance policies, or arrange for such coverage through an affiliate or a parametric insurance company.
The coverage would have to include compensation for up to 180 days’ fixed costs and payroll for covered public health emergencies. Insurers may offer coverage above and beyond that level. The bill would make the federal government share the burden with private industry.
Related: