U.S. Representative Carolyn Maloney’s reintroduction of the Pandemic Risk Insurance Act (“PRIA”), which would create a shared public-private insurance program styled after the Terrorism Risk Insurance Act, has stirred skepticism among several trade groups.
Many groups explain that their main source of skepticism is that PRIA would place too large a burden on the private insurance market. Nat Wienecke, senior vice president, federal government relations and political engagement for the American Property Casualty Insurance Association stated, “only the federal government can be the financial bridge for a crisis of this scale, proportion and duration.” “The legislation would make the business interruption insurance that countless small businesses rely upon unaffordable or unavailable by forcing insurers to include an uninsurable risk in all business interruption policies,” Wienecke said.
Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies, joined Wienecke in his concern that PRIA would impose unrealistic burdens on private insurers. “Forcing insurers to absorb losses by shoehorning pandemic risk into a mechanism designed for something else entirely will only raise costs and red tape for consumers while doing nothing to better protect them,” Grande said. Grande further stated that “a pandemic that inflicts catastrophic losses, concurrently across all geographies, is still an uninsurable event, and nothing in the new PRIA bill changes that reality.”
Remaining somewhat skeptical, the Independent Insurance Agents and Brokers of America has taken a more neutral stance to the reintroduction of PRIA. Charles Symington, senior vice president for external, industry and government affairs stated “the Big “I” believes there is merit in including the PRIA model in public policy discussions on how to cover future pandemics and considering its pros and cons.” “However, there are questions being raised by some in the carrier community regarding the effectiveness of the PRIA approach,” said Symington.
Some groups, however, have applauded the reintroduction of PRIA. The Business Continuity Coalition stated, “the insurance market disruption that has resulted from the current pandemic requires a public-private partnership to ensure that our economy is properly protected against pandemic risk moving forward.”