Insurers lobby for federal pandemic insurance program

Insurers lobby for federal pandemic insurance program

One look at the numbers, and the problem is clear.

U.S. businesses are losing an estimated $1 trillion a month as businesses are disrupted due to the coronavirus pandemic, according to estimates by the American Property Casualty Insurance Association. Yet, insurers collect only $4.5 billion a month for all commercial property policies.

This month, the groups representing the underwriters, the brokers and the agents are lobbying members of the House Financial Services Committee on a proposal to provide a type of pandemic coverage for the future.

The proposed Business Continuity Protection Program or BCPP would offer, in part, government-subsidized revenue replacement and protection for up to 80% of specific losses, like payroll expense or operational losses for up to three months.

The program would function something like the Federal Flood Insurance Program - with the government as the underwriter and insurers administering the policies.

Congresswoman Carolyn Maloney (D-N.Y.) has introduced legislation to create a Pandemic Risk Reinsurance Program. It would allow insurers to decide whether to participate and permit businesses to decide whether to purchase a policy.

It is "a bailout program masquerading as insurance," said research firm Dowling & Partners in its publication IBNR Weekly. The authors said that the role for the insurance industry