Groups representing the mutual insurance and property casualty insurance industries joined dozens of other groups Tuesday in calling for a federal business continuity fund to deal with the COVID-19 pandemic.
“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,” President Charles Chamness of the National Association of Mutual Insurance Companies, or NAMIC, said in a statement. “The rescue of our economy is beyond the abilities of any one company or industry.”
The proposed fund would be backed by the federal government and operate under a special administrator’s authority, according to a letter Tuesday from 36 industry groups. The administrator would be able to enter “contracts with interested businesses to administer the Recovery Fund and facilitate the distribution of federal funds and liquidity to impacted businesses and their employees.”
The letter was addressed to President Donald Trump, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, Senate Minority Leader Charles E. Schumer, Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy.
David A. Sampson, president of the American Property Casualty Insurance Association, or APCIA, praised the passage of the new federal law to help industries and individuals during the COVID-19 pandemic enacted last Friday.
“However, additional federal relief is essential to keep COVID-19-impaired businesses solvent and employees working,” Sampson said in a statement. “The Recovery Fund will leverage the ability of the private sector to scale and deploy immediate liquidity to our communities. … Property casualty insurers will continue to work with the Administration and Congress on building out this proactive federal solution to support American businesses, employees, and the U.S. economy.”
Other insurance groups that signed the letter include the Council of Insurance Agents and Brokers, Independent Insurance Agents and Brokers of America, National Association of Professional Insurance Agents, Reinsurance Association of America and the Wholesale and Specialty Insurance Association.
NAMIC and APCIA recently released statements criticizing proposals related to business interruption insurance. They referenced a New Jersey bill that is on hold as well as proposals in New York, Ohio and Massachusetts.
Asked whether the fund is being proposed as a substitute for business interruption proposals, NAMIC spokesman Matt Brady said, “Not in comparison to anything specific, but as the federal government seeks to address the impact of the pandemic on businesses, this would be the fastest and most effective way to provide assistance.”