Members of the U.S. House of Representatives have issued two new letters joining the chorus of opposition to retroactive business interruption coverage for COVID-19 claims.
Last week, Rep. William Lacy Clay (D-Missouri), Chairman of the House Financial Services Subcommittee on Housing, Community Development and Insurance, along with six senior Democratic members, sent a letter to Speaker of the House Nancy Pelosi (D-California) and House Majority Leader Kevin McCarthy (R-California) detailing the problems with retroactive business interruption proposals.
Specifically, the letter states that, “we believe that retroactively altering pre-existing insurance contracts to require payouts for losses caused by COVID-19 (even if such coverage is paid for by the federal government) would only benefit a few and would ultimately not provide the broad relief for smaller businesses that we have continued to advocate for.”
Additionally, Chairman Clay and Rep. Steve Stivers (R-Ohio), Ranking Member of the House Financial Services Subcommittee on Housing, Community Development and Insurance, also sent a letter to the White House explaining the flaws with such proposals.
Their letter refers to a recent National Association of Insurance Commissioners statement which opines: “While the U.S. insurance sector remains strong, if insurance companies are required to cover such claims, such an action would create substantial solvency risks for the sector, significantly undermine the ability of insurers to pay other types of claims, and potentially exacerbate the negative financial and economic impacts the country is currently experiencing.”
The new letters echo several other letters that were recently sent to the Trump Administration.
The Big “I” will continue to raise objections to retroactive business interruption proposals while also working with the insurance industry, policyholders, the Trump administration and Congress on the Payment Protection Program, the Recovery Fund, and other practical solutions that will help businesses of all types survive the current crisis.
Joseph Cortina is Big “I” director, federal government affairs.