Following President Trump’s remarks on business interruption insurance several weeks ago, there has been a growing focus on business interruption insurance and whether it covers claims from COVID-19. In the days following the President’s comments, several congressional letters expressing concern about retroactive business interruption proposals and their potential impacts were sent to the administration. The letters detailed the counterproductive and dangerous nature of pursuing retroactive business interruption insurance.
The day President Trump made his remarks, Sen. Tim Scott (R-South Carolina) sent a letter to the White House with several other members of Congress, including Senate Banking Committee Chairman Mike Crapo (R-Idaho), that addressed concerns with retroactively changing business interruption insurance policies.
Days later, 22 House Financial Services Committee Republicans, led by Rep. Steve Stivers (R-Ohio), sent President Trump a letter opposing retroactive business interruption insurance coverage, detailing the harm such proposals would create for both consumers and the insurance market.
Just one day after that, Rep. Ted Budd (R-North Carolina) and 12 other members of the Republican House Freedom Caucus sent a letter to the White House opposing retroactive business interruption coverage, detailing the many constitutional issues with retroactively changing legal contracts. The letter notes that “efforts by Congress or state legislatures to retroactively amend business interruption policies will engender unprecedented levels of legal challenges while driving up the cost of insurance coverage of all kinds.”
This flurry of congressional activity made an impact with the administration and the U.S. Treasury Department recently replied to all three letters, noting, “While insurers should pay valid claims, we share your concerns that these proposals fundamentally conflict with the contractual nature of insurance obligations and could introduce stability risks to the industry.”
Throughout the COVID-19 crisis, the Big “I” has worked with the insurance industry to advocate against any actions that would retroactively change business interruption policies. We are especially grateful for Sen. Scott, Rep. Stivers and Rep. Budd for leading these letters and we are pleased that the Treasury Department shares many of our concerns with retroactively changing business interruption policies.
The Big “I” will continue to oppose misguided efforts in Congress and the states to retroactively alter insurance contracts while also advocating for practical solutions to deliver financial assistance to businesses across the country hard-hit by the COVID-19 pandemic.
Wyatt Stewart is Big “I” senior director of federal government affairs.