A federal insurance backstop for future pandemics could become a reality if the Pandemic Risk Insurance Act (PRIA), introduced by Rep. Carolyn Maloney (D-NY) earlier this week, is passed into law.
The bill is being compared to the Terrorism Risk Insurance Act that passed in the aftermath of the September 11, 2001, terrorist attacks.
As the COVID-19 pandemic took its toll, related business claims and lawsuits against insurers for business interruption were filed in droves, only to see them halted by the courts. Only one claim made it as far as a jury – and the plaintiff lost.
If passed, the proposed law would require insurance companies to provide coverage for businesses in the event of another pandemic.
Under the plan, the federal government would be responsible for 95% of eligible pandemic-related insurance claims. Businesses that suffer a loss from a federal government-identified public health emergency would file a claim with their insurer. The insurer would disclose the details of the coverage provided by the federal program, process the claim, and send it to the U.S. Health Secretary.
A former version of this bill was introduced to the 116th Congress in May 2020. The bill was referred to the House Committee on Financial Services and garnered 29 Democrat cosponsors.
The UMA Legislative & Regulatory Committee will consider support of the bill in their next meeting.