Insurance trade groups banded together with retailers and trade groups representing other industries that have been affected by widespread shutdowns amid the coronavirus pandemic to ask Congress for a business continuity relief fund.
“Government mandates that have been put in place to stem the spread of COVID-19 such as widespread quarantines, travel restrictions, and social-distancing measures are driving an unprecedented level of disruption to business activity and continuity,” said the groups in a letter addressed to federal government leaders. “This disruption is rippling across the U.S. economy, severely constraining consumer and business spending. Organizations of all sizes and their employees are facing insurmountable strain. Without broad-based and expeditious federal action, long-term damage to the financial markets, rampant unemployment, and irreparable harm to communities are almost certain.”
Businesses in many sectors need a “short-term and immediate pathway forward” to meet operating expenses, remain viability, and retain employees, the groups said. While applauding Congress for passing the Coronavirus Aid, Relief, and Economic Security (CARES) Act last week, further action is needed in the form of the proposed COVID-19 Business and Employee Continuity and Recovery Fund. The groups modeled the proposal on the federal assistance fund created by Congress after the terrorist attacks of Sept. 11.
“The coronavirus has struck our nation and the world in an unprecedented way, significantly affecting nearly every aspect of the economy, including mutual insurance companies, in communities across the country,” said Charles Chamness, president and CEO of the National Association of Mutual Insurance Companies (NAMIC). “The rescue of our economy is beyond the abilities of any one company or industry,
Calls for insurers to pay out business interruption losses due to coronavirus-related shutdowns regardless of exclusions have ramped up in recent weeks. Multiple states are considering legislation and a California-based business coalition has called upon state insurance commissioners and insurers to cover claims. Insurer and agent groups have objected to these measures, while acknowledging the upheaval that businesses currently face.
“During times of crisis it is understandable that policymakers who are trying to help sometimes make rash proposals that have ramifications they don’t quite understand, which would harm both industry and policyholders in the long term,” said Mike Becker, executive vice president and CEO of the National Association of Professional Insurance Agents (PIA). “Rather than a defensive response, PIA has instead helped create a positive alternative for these struggling businesses that doesn’t upend existing insurance contracts and practices.”
The Council of Insurance Agents and Brokers (CIAB) noted that the relief fund would “not compel insurers, brokers, TPAs or others to contract with the federal government for distribution of funds” but that the association has “heard an outpouring of sentiment from the commercial brokerage community supporting engagement with the government to assist clients in obtaining relief.”
Editor Erin Ayers can be reached at [email protected].
