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US introduces Pandemic Risk Insurance Act

Carolyn B. Maloney, a member of the US House Financial Services Committee, alongwith various stakeholders introduced the Pandemic Risk Insurance Act of 2020 (PRIA). The legislation will create the Pandemic Risk Reinsurance Programme, a system of shared public and private compensation for business interruption losses resulting from future pandemics or public health emergencies.

The act would be an important step in Congress’s prevention efforts against economic losses from future pandemics by both requiring insurance companies to offer business interruption insurance policies that cover pandemics, and creating a Pandemic Risk Reinsurance Programme to ensure that there is sufficient capacity to cover these losses and protect our economy in anticipation of a resurgence of COVID-19 and future pandemics, the Congresswoman said in a statement.

Like the Terrorism Risk Insurance Act (TRIA), the federal government would serve as a backstop to maintain marketplace stability and to share the burden alongside private industry.