Retail Trade Groups Back PRIA
The momentum is building for federal legislation that broadens reinsurance to include viral pandemics. More than a dozen retail trade groups signed a letter backing the “Pandemic Risk Insurance Act of 2020” (PRIA).
The devil will be in the details, as it is for any legislation.
But as I wrote in a recent OpEd in Morning Consult (https://lnkd.in/eQXgrWD), President Trump and Congress must act to create a federal backstop for pandemic exposure, modeled after the Terrorism Risk Insurance Act that was passed after 9/11. Especially as some elected officials try to retroactively insert pandemic risk into business interruption contracts, even when the contracts explicitly exclude these risks.
New legislation should cover viral pandemics, new types of cyber-attacks, and other rare but catastrophic events. And it should have a shared public and private compensation model for certain losses, using what the industry calls “parametric triggers.” This would offer a clear-cut way of determining how much a business recoups for a given amount of financial damage.
And it would immediately inject confidence into the economy today, as stimulus dollars are flowing.
