To declarer can rise a recess of the subcommittee at any time. Without objection members of the full committee not on the subcommittee are authorized participate in todays hearing. Members are reminded to keep their video function on at all times, even when they are not recognized by the chair. Thatrs are also reminded they are responsible for muting and unmuting themselves and to mute themselves after they are finished speaking. Consistent with the regulations accompanying House Resolution 965, we will only mute members and witnesses as appropriate. When not recognized for to avoid inadvertent background noise. Members are reminded that our house rules relating to the order and the decorum of the desk decorum applied to this remote hearing. This hearing is entitled insuring against a pandemic challenges and solutions for , policyholders and insurers. I now recognize myself for three minutes to begin with an opening statement. According to the Congressional Research service, 110 Million Worldwide could enter a state of extreme poverty due to the Global Economic contraction and here in the United States, 67 Million People filed for Unemployment Insurance since march of this year. The harmful effects of this pandemic are the stability of Small Businesses, like restaurants cannot be overstated. Thereve been literally dozens of restaurants in my home district in st. Louis that have closed, many permanently, as a result of this pandemic. Result of this pandemic. And with them, the and with them, the vendors who sell the goods, the farmers who grow the food, truck drivers, Storage Facilities and entire , supply chains are all affected. Though many businesses have insurance, most of the policies have exclusions for pandemics which are likely to be upheld by the courts. S have exclusions for pandemics which are likely to be upheld by the courts. I would add that for many around this country the probability of failing to enforce a policy is unlikely given the high cost of litigation. On the other hand it isnt realistic or practical to expect the Insurance Industry to shoulder the astronomical cost of a Global Pandemic. The american property and Casualty Insurance association has estimated that paying all claims regardless of exclusions would amount to 1 trillion per month while the legislation by my colleagues like congressman thompson and congresswoman maloney and the input. My bottom line is any solution will need effective buyin from the industry with a conundrum posed by the fact that many of the Business Interruption case is being adjudicated have been dismissed and for businesses to make an expectation that you have some skin in the game particularly if youre going to petition or even accept. The industry could work with the business and consumer groups for a type of umbrella policy of which the businesses pay the Current System is rife with confusion and complexity. It is my firm belief they shouldnt need a battalion of lawyers to handle their Insurance Claim after faithfully paying their insurance premium. I look forward to the testimony of the witnesses as we roll up our sleeves and try to find a viable solution. At this time the chair now recognizes the Ranking Member for an opening statement. Member for an opening statement. Thank you for convening the hearing. Id like to take a moment to thank congresswoman maloney for her efforts to put forth an idea as early as may of this year her work should be applauded as a symbolic first step and id like to take a moment backward and put the hearing in perspective. The problems and solutions we will discuss today are about creating a plan for the next pandemic. For that reason so much more important that we do it right then get it fast. Congresswoman maloney reached out and asked for bipartisan collaboration. I feel very strongly as you do to mr. Chairman and that any product that we put forth must have meaningful support from both parties, and ultimately if we are going to have any impact on the Senate Deliberations we need a big vote so we need a bipartisan agreement. And as the Ranking Member of the subcommittee, i can tell you republicans are committed to working in a bipartisan way but we need to make sure that as we do that, i think again we take a step back and dont start with a preconceived outcome. When we take a step back maybe we will use the insurance model or maybe we will end up with a noninsurance approach like you im sorry, like eight parametric ppp grant. That are shut down during the we must make sure that it solves the problem of the businesses that are shut down during the next pandemic. Some of my colleagues today may focus on the existing framework in place for the Risk Insurance but i want to be clear the scale and scope of the pandemic is orders of magnitude bigger than a terrorist attack and you illustrated that, mr. Chairman. We should spend our time trying to understand the nature of the problem and the issues around those that will be testifying today. Those that will be testifying today. Furthermore, its proven disastrous and any solution we address must look at cancellations and thats something that isnt in the legislation. I would like now to yield time to the Ranking Member but before i do while i am not advocating for any one proposal i would ask unanimous consent to enter into the record they did not have a witness that was allowed for this hearing so i would ask unanimous consent to enter their statement into the record. A. Without objection. I am going to recognize the mr. Mchenry. When the pandemic hit in march the Economic Forecasters are warning Small Businesses many of which havent recovered from the disruption they have experienced already this year may permanently close the may permanently close if policymakers do not act. Congress has an Important Role to play but with the election of president elect joe biden im hopeful the government will respond to this pandemic effective leadership which has been and continues to be absent. So i am looking forward to todays discussion of the paths forward and i think the witnesses we will have here today. I yelled back thank you mr. , chairman. Chair clay i would now recognize the Ranking Member of the full committee the gentleman from North Carolina for two minutes. Thank you chairman clay for your leadership. You have been a strong advocate for your convictions during your time in congress and i want to commend you for also your bipartisan work i appreciate the committee holding this hearing. Its been delayed because of the nature of the sElection Year and whats it has been delayed because of the nature of this Election Year and what has happened this past couple of months. I appreciate the comments of the gentlelady from new york, ms. Maloney. What she has done on this issue is put a marker down to Show Congress should get to work on a for futuresponse pandemics. And while i have concerns about the construct of her legislation, pria. There are some unworkable parts of the issues laid out and some unresolved parts but we have i think we can work through and come to a bipartisan agreement that would have lasting impacts on Small Businesses and folks across the country. Dohink our businesses deserve a bipartisan consensusbased solution that builds on existing successful ideas we have put in place over this last year. I think we need to look at the solutions and incentivize the participation. We need to look at solutions that are scalable. Solutions that use our statebystate, harness the power of our state regulatory environment. And look at existing programs like ppp, that have saved millions of Small Businesses. Thank you mr. Chairman for your leadership and look forward to the testimony today. You, mr. Y thank mccann rate. Now i want to mchenry. Now i want to recognize the general aid from new york, ms. Maloney. You chairwoman waters and subcommittee chair clay for holding this hearing. After the terrorist attacks of 9 11, the economy completely shut down. We couldnt build anything because Insurance Companies would not ensure any property against terrorist attacks. So we came together in a bipartisan way and past and it tria. Passed unlocked the market and got the it successfully economy moving again and put people back to work and that is what we are trying to do with the pandemic. , pandemic Risk Assurance act pandemic Risk Insurance act pria . Tens of thousands of Small Businesses have closed their doors permanently and entire industries and theyve been upended and have no way to protect themselves from future pandemicrelated losses. Currently, Business Interruption insurance policies explicitly exclude pandemics. Exclude pandemics. We cant continue to expose the economy and Small Businesses to this level of risk and expect them to recover. We know the federal we know the federal government will step in during the next crisis, so why not be proactive and develop a longterm solution. Pandemic Risk Insurance act pria is a starting point for a forwardlooking Risk Sharing Partnership that would provide a federal backstop that include coverage for pandemics. Pandemic Risk Insurance act pria would create a totally voluntary program and insurers could provide the policy if they wanted to and policyholders could purchase them if they wanted to. To and policyholders could purchase them if they wanted to. Its totally a broad consensus has emerged that pandemic risk is insurable find appropriate federal backstop. This is supported by more than 50 stakeholder organizations. Its the best way to structure at this point we are debating the best way to structure such a program and im willing to collaborate with any of my colleagues in the democratic and republican parties who approved the bill and move to do just that. I would like to place in the bill the list of 50 organizations and Insurance Companies supporting it. Chair clay without objection. Today we welcome the testimony of the distinguished witnesses. A. M. Cantrell, the owning the owner of general store on behalf of the National Retail federation. We also have john doyle president and ceo marsh and , mcclennan. Brian coleman, the chief counsel on behalf of ap cia. Michelle melindas mclaughlin, chief underwriting officer of chubb north america. Editor andxecutive senior fellow International Center for law and economics. Our witnesses are reminded that your oral testimony will be lidded to five minutes. You should see a timer on your screen that will indicate how much time you have left nhi will go off at the end of your time. I would ask you to be mindful if dutch of the time and quickly wrap up your testimony if you hear the chime so we can be , respectful of both the witnesses and the Committee Members time. Without objection your written , statement will be made part of the record. Ms. Cantrell you are now , recognized for five minutes to give an oral presentation of your testimony. Good morning. It is an honor to appear to before you today to discuss the pandemic risk from a policyholders perspective. I would like to give a special shout out to women and thanks to congresswoman velasquez, who has been a champion for the women owned businesses. I am so happy she chairs the house Small Business committee. The house that this Committee Meeting is being held shows shows members of Congress Care about people on main street. Has partnered with congresswoman Carolyn Maloney to sponsor and we would like to thank you for the leadership on the issue. We look forward to bringing muchneeded protection across the country to those that have been suffering during this crisis. Retail sales and jobs have been demonstrated by this and its not only a Health Crisis but a dire economic crisis. It is an honor to appear today on behalf of. All this changed in march, when my team and i discussed closing friday march 13th i immediately called my Insurance Company live company. He taught me my term in business, measured risk. That is what seven years ago. He called my move to a new location seven years ago. We doubled Square Footage and quadrupled my business. Hes always been extremely helpful and straightforward. I member proudly showing my new place as he explained our comprehensive insurance policy that would cover 12 months of business income if something would happen and if i needed to shut down. I have all risk, special Flood Insurance from the hartford which cost 6182 annually for i also carry workers comp. This is a big expense for a Small Business, what i thought would help me in crisis situations. However harsh reality set in. I quickly learned viruses and pandemics were excluded from insurance policies like mine, even though we were ordered to close by the governor there would be no relief because it was not considered not property Business Interruption because it was damage. Insurance company should not be in the this is of denying policyholders coverage when they needed it the most. What happened to, like a good neighbor, we are there. Then i slowly realized what was happening. Even as i followed up the post on social media saying restaurants to be covered a reached offer guidance there was no relief in sight. I made calls to my leathered and tried desperately to figure out how to cover our financial obligations and pay our team members. I kept trying to figure out our next move. The next few months have been the darkest of my life. Navigating the uncertainty of the business i dedicated years my life to has been set and stressful. Compounded by the traumatic hoping to get a ppp loan. Experience of applying for and hoping to get a ppp loan. We did receive a 50000 loan we did receive a 50000 loan fortunately we did receive a 50000 loan and i would like to thank members of congress who supported the cares act which help keep us afloat. Overall we were close three months, missing easter and mothers day. In 2019 we made 300,000. 166,000 we made half, by understand this proposed solution understand only covers future pandemics but we never know when the next pandemic will come. We didnt see this one coming in the meantime marriage members of in the meantime, i encourage members of congress to look at those businesses that were forced to close during government mandates. Even if it is not the form of business interaction as such. Also the National Retail federation as a member of the Business Continuity coalition. Bcc seeks widespread availability but Insurance Coverage and restoration of pandemic coverage and other lines. Includes movie, tv, employment, and other lines hardhit by covid19s. Pandemic Risk Insurance act pria would help administer Insurance Coverage model on the program that was established in 9 11 congress stepped in its. Its time for washington to do the same for a pandemic. Not every pandemic has a worldwide impact but when it occurs legislation of that approach of managing that is time for Real Solutions for real problems prepared for any questions you may have. You are recognized for five chair clay thank you, ms. Cantrell. Mr. Doyle, your recognized. My name is john doyle. Mclennan, thesh Worlds Largest insurance broker. I appreciate the opportunity to speak to pandemic risk. First and foremost we are deeply concerned of the impact on the economy to be an advocate for clients which is why im here with you all today. At marsh, we believe a Publicprivate Partnership is the best option to pursue for a pandemic risk solution. I want to recognize the leading role congresswoman maloney had in the debate including introducing the legislation and compelling reasons that brought us here today. We feel there are compelling reasons to act now. Publicprivate pendant solution will accelerate and make recovery by reducing uncertainty. Moving forward Capital Markets , will seek assurance that companies have protection against perspective pandemic risk. The pace of recovery depends upon the nature and the degree of confidence in the marketplace. Moving for Capital Markets will seek assurance that companies have protection against perspective pandemic risk. The pace of recovery depends upon the nature and the degree of confidence in the marketplace. Taking action now has financial protection against future pandemics to absorb some of the initial financial sho