[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7412 Introduced in House (IH)]
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116th CONGRESS
2d Session
H. R. 7412
To establish a temporary voluntary program for support of insurers
providing business interruption insurance coverage during the COVID-19
pandemic, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 29, 2020
Mr. Thompson of California introduced the following bill; which was
referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To establish a temporary voluntary program for support of insurers
providing business interruption insurance coverage during the COVID-19
pandemic, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Business Interruption Relief Act of
2020''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) mandatory civil authority shutdowns as a result of the
coronarvirus disease 2019 (COVID-19) have adversely impacted
businesses throughout the United States;
(2) the American economy relies in part upon an investment
in and expectation of insurance benefits that back business
assets and the workforce;
(3) many businesses have paid policy premiums for business
interruption coverage and, in particular, for coverage for
civil authority shutdowns of businesses;
(4) many businesses that purchased business interruption
coverage and coverage for civil authority shutdowns did so in
the expectation that insurance would protect a temporary
shutdown of their workforce, prevent layoffs and furloughs, and
allow an orderly restart of operations; and
(5) State laws mandate an orderly and prompt payment of
first party insurance claims and insurers have claim management
resources with the expertise and skills to timely manage claims
payment and distribution of funds according to expected and
relied upon guidelines and procedures that policyholders had
the expectation to receive.
(b) Purposes.--The purposes of this Act are--
(1) to establish a program to encourage and provide support
for insurers who timely pay claims under business interruption
coverage to policyholders adversely affected by civil authority
shutdowns resulting from the COVID-19 pandemic; and
(2) to establish the program in a manner that ensures
that--
(A) carriers that sold policies that cover business
interruption losses for COVID-19 do not receive any
Federal windfall; and
(B) carriers that sold policies that expressly
exclude coverage for a virus or pandemic for COVID-19
can avoid costly litigation with policyholders, and
policyholders may receive policy benefits to compensate
for government shutdown and business interruption.
SEC. 3. PUBLIC/PRIVATE PARTNERSHIP BUSINESS INTERRUPTION INSURANCE
RELIEF PROGRAM FOR COVID-19.
(a) Establishment.--There is established in the Department of the
Treasury the Business Interruption Relief Program.
(b) Voluntary.--Participation in the Program on the part of an
insurer shall be voluntary at the option of the insurer.
(c) Eligible Policies.--To be eligible to participate in the
Program, an insurer shall have, as of the date of initial participation
in the Program, one or more outstanding and existing policies of
insurance issued to a policyholder for business interruption insurance
coverage that--
(1) expressly include coverage for losses during any period
of time that any civil authority shutdown as a result of the
COVID-19 pandemic is in effect; and
(2) expressly exclude coverage for a ``virus''.
(d) Assistance.--
(1) Reimbursement for payment of claims.--Under the
Program, the Secretary shall provide financial assistance to
reimburse any participating insurer that voluntarily pays
benefits under an eligible policy for COVID-19 losses, thereby
waiving the exclusion referred to in subsection (c)(2), in the
amount of--
(A) the benefit to be paid in accordance with all
terms of the policy; plus
(B) any expenses incurred by the participating
insurer relating to paying such claim.
(2) Prohibition.--The Program shall provide no benefit or
reimbursement for an insurer's payment and claim expenses for
benefits paid under any policy for business interruption
coverage that does not expressly exclude coverage for a
``virus''.
(3) Treatment of rights and duties.--
(A) Policyholders.--Policyholders under policies
for which reimbursement is provided under the Program
shall retain all first party rights to policies for
business interruption insurance coverage.
(B) State law.--Participation in the Program by an
insurer shall not supersede or replace any rights of
good faith and fair duty under State insurance law.
(4) Compliance.--The Secretary shall take any such actions
as may be necessary, before providing any assistance pursuant
to paragraph (1) to a participating insurer, that the
participating insurer makes payment to policyholders in
compliance with the terms and conditions of the policies
referred to in subsection (c).
(e) Limitation on Assistance for a Participating Insurer.--The
Secretary shall limit the amount of assistance provided for a
participating insurer under the Program under this section according to
the limits of the eligible policies involved.
(f) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Business interruption insurance coverage.--The term
``business interruption insurance coverage'' means property and
casualty insurance coverage provided or made available for
losses resulting from periods of suspended business operations,
whether provided under broader coverage or separately.
(2) Civil authority shutdown.--The term ``civil authority
shutdown'' means forced closure of businesses, or evacuation,
by mandate, law, or order of any State or local government or
governmental officer or agency.
(3) COVID-19 losses.--The term ``COVID-19 losses'' means
for losses resulting from business interruption due to a civil
authority shutdown as a result of the COVID-19 pandemic.
(4) Eligible policy.--The term ``eligible policy'' means a
policy for business interruption insurance coverage described
in section 3(c).
(5) Insurer.--The term ``insurer'' has the meaning given
such term in section 102 of the Terrorism Risk Insurance Act of
2002 (15 U.S.C. 6701 note).
(6) Participating insurer.--The term ``participating
insurer'' means an insurer that--
(A) has voluntarily elected, in accordance with
such procedures and requirements as the Secretary shall
establish, to participate in the Program; and
(B) is in compliance with the requirements under
this section for participation in the Program.
(7) Program.--The term ``Program'' means the Business
Interruption Relief Program established under this section.
(g) Regulations.--The Secretary shall issue any regulations
necessary to carry out the Program.
(h) Funding.--There is authorized to be appropriated such sums as
may be necessary for providing financial assistance under the Program
to participating insurers.
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