Reinsurance News

APCIA hosts virtual meeting to push for federal pandemic solution

15th July 2020 - Author: Charlie Wood

Members of The American Property Casualty Insurance Association are to meet virtually with individuals from of the House Financial Services Committee over the next two weeks to advocate for the Business Continuity Protection Program.

coronavirus-covid-19-pandemicThe BCPP is a customer-focused proposal for a federal program tailored specifically to help businesses meet the financial challenges from future pandemics and bolster the US economy.

The solution is a response to financial challenges facing many businesses as a result of government enforced lockdown measures to manage the spread of COVID-19, and after it was found that business interruption policies often fall short of providing sufficient protection.

It has been designed to provide revenue replacement assistance that would reimburse up to 80% of payroll, benefits, and expenses for three months.

Businesses would purchase their desired volume of revenue replacement assistance via state-regulated insurers that voluntarily participate with the new program.

Funds would be automatically distributed following a Presidential viral emergency deceleration, and, closure decelerations would specify which types of businesses are partly or fully closed.

The BCPP would be run by the Federal Emergency Management Agency, and would also be able to purchase reinsurance to protect federal taxpayers.

“The BCPP is a solution that can work for everyone – customers of all sizes and structures – to provide protection against widespread economic shutdowns due to a future viral outbreak,” said David Sampson, president and CEO at the APCIA.

“The BCPP fills the gaps in the marketplace and avoids the uncertainty that has marked the current pandemic, including providing protection for COVID-19 recurrence and mutations in the next public health viral emergency.

“Shutdowns due to COVID-19 have now caused what may become the greatest domestic and global insured loss event in history. The BCPP is an affordable and efficient program for getting much-needed financial assistance to businesses quickly in a future pandemic.

“Pandemics are inherently uninsurable risks. Any risk where the same thing happens everywhere at the same time is by definition, uninsurable. Proposals envisioning insurers underwriting primary business continuity coverage for all businesses across the economy don’t reflect the realities of the insurance marketplace.

“Simply put, the insurance marketplace is not structured to produce a broadly available product for pandemic losses at a price that would be affordable by the vast majority of American businesses.

“We urge the House Financial Services Committee to support the BCPP,” he added.

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