In this episode of AMBestTV, expanding the federal backstop for terrorism to include pandemic coverage retroactively would ease the COVID-19 economic impact, said Zach Finn, an insurance professor with Butler University. Click on http://www.ambest.com/v.asp?v=finn320 to view the entire program.
As COVID-19 continues to spread, economic losses continue to widen. Finn highlighted what his proposal involving Terrorism Risk Insurance Act (TRIA) would contain and accomplish.
"My proposal is not to re-create the wheel, but to liberalize TRIA to include the peril of pandemic," said Finn. "Make that coverage retroactive to cover the COVID-19 losses. Go back to anybody who did not buy TRIA before and give that person a chance to retroactively purchase the coverage. If you do that, then the Secretary of the Treasury could immediately declare a certified pandemic. We could start to adjust business interruption and event cancellation losses and turn the market for that coverage back on."
Finn said that at the core of his proposal is a mechanism to get "markets moving again."
"Basically what I am proposing is that we need to get all this uncertainty off of American businesses and individuals’ balance sheets and use the insurance industry as a pass-through to get it into the TRIA mechanism. … Then, the government can go back and work with the industry to figure out if it needs to adjust the actual risk sharing."
"My proposal is just a more efficient way for the government to backstop the insurance industry so that this coverage can exist in the private marketplace."
Recent episodes of AMBestTV include:
- Novarica Senior Vice President: COVID-19 Could Put Pressure on Workers' Comp, Life Insurers: The quickly spreading COVID-19 virus could spike workers’ compensation and life insurance claims, said Mitch Wein, senior vice president, consulting and research, Novarica: http://www.ambest.com/v.asp?v=wein320.
- Washington State’s Insurance Commissioner on Lessons Learned From Epicenter of COVID-19 Outbreak: Mike Kreidler, insurance commissioner, State of Washington, said his recent emergency order requiring health insurers to waive copays for consumers requiring Covid-19 testing is part of a campaign to contain the impact of the virus: http://www.ambest.com/v.asp?v=kreidler320.
- RIMS CEO: Conference Cancelled Due to COVID-19 ‘Uncharted Territory’: The "unprecedented challenge" of the pandemic led the Risk & Insurance Management Society's decision to cancel its 2020 annual conference, said Mary Roth, CEO of RIMS: http://www.ambest.com/v.asp?v=roth320.
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