Transcripts For CSPAN2 House Hearing On Insurance Coverage D

Their video functions on at all times even when they are not recognized by e chair. Members are also reminded tha they are responsible for muting and on muting themselves and to commute to themselves after ty finishedpeaking. Constent with the regulations accompanying House Resolution 965 will only mute members and witnesses as appropriate. When not recognized for inadvertent background noise. Members are rinded that our house rules relatin to the order andhe decorum of the hearing. This hearing is entitled insuringgainst a pandemic challenges and solutions for policiesnd i now recognize myself for three minutes to begin with an opening statement. According to the Congressional Research service, 110 million ople could enter a state of extreme poverty do that tohe global econoc contraction and here in the United States, 67 Million People filed for Unemployment Insurance since march of this year. The harmfu effects of this pandemic are the stability of small bunesses like restaurants cannot be overstated. Thereve been literally dozens of restaurants in my home district in st. Louis that have closed, many permanently,s a result of this pandemic. Andith them, the vendors, the Truck Drivers Storage Facilities and tire supply chains arell affected. Though many businesses have insurance, most of the policies 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 t high cost of litigation. On the other hand it isnt realistic or practical to expect the Insurance Industry to shoulder t 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 trillion per month while the legislation by my colleague like congressman thompson and congresswoman maloney and the input. My bottom line is any solution will need effective buyin from the industry with a conunum posed by the fact that my of the busine interruption case is being adjudicated have been dismissed and f 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 siness and consumer groups for a type of umbrella policy of which the businesses pay because thisurrent system isight and because it is my firm belief they shouldnt need a battalion of lawyers after faithfully paying and i look forward to the testimony of the wnesses as we roll up our sleeves and try to find a viable solution. At this time the chair now recognizes t Ranking Member for an opening statent. Thank you for convening the hearing. Id lik to take aoment to thank congresswoman maloney f her efforts to put fth an idea as early as may of this year her work should be applauded as a symbolic first step and id le to take a moment backward and put the hearing in perspective. The problems and solutions we ll discuss today are about creating a plan for the next pandemic for that reason so mh more important that we do itight then get itast. Congresswoman maloney reach out and asked for bartisan colloration. I feel very strongly as you do to mr. Chairman and that any product that we put fth must have meaningfu support from both parties, and ultimately if we are going to have any impact on the Senate Deliberations w need a big vote so we need a bipartisan agreement. And as the Ranking Member of the subcmittee, i can tell you republicans are committed to working in a bipartisan way but need to mak 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 willnd up with a noninsurance approach likeou pandem. We must make sure that it solves e problem of the businesses that are shut down during the xt pandemic. Some of my colleagues today may focus on the existing framework inlace for the Risk Insurance but i want to be clear the scale and scope of the pandemic is orders of magnitudeigger than a terrorist attack and you illustrated that, mr. Chairman. We should spend our time tryg to understand the nature of the problem and the issues around those that will be testifying today. Furthermore, its prove disastrous and anyolution we adess must look at cancellations and thats something that isnt in the legislation. I would like now to yield time to the Ranking Member t before i do while i am not advocating for any one proposal i would ask unanimou consent to ent into the record they did not hav a witness that was allowed for this hearing so i wouldsk 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 policymakers 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. Im thankful for the witnesses we have and yield back thank you mr. Chairman. 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 happened they put a marker down. While i have concerns about the construct of her legislation. There are some unworkable parts of the issues laid out and some unresolved parts but we have come to a bipartisan agreement that have impacts on the business. We need to look at the solutions and incentivize the participation. And solutions that are scalable and theyve saved millions of Small Businesses. Thank you for holding this important hearing. After the terrorist attacks of 9 11, the economy completely shut down. We couldnt build anything because Insurance Companies against terrorist attacks so we came together in a bipartisan way and past and it unlocked the market and got the economy moving again and put people back to work and that is what we are trying to do with the pandemic. 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 pandemic related. Currently, Business Interruption insurance policies explicitly 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 government. And during the next crisis, so why not to be proactive and develop a longterm solution. This is a starting point for a forwardlooking Risk Sharing Partnership that would provide a federal backstop that include coverage for pandemics. It 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. Its totally voluntary. This is supported by more than 50 stakeholder organizations. Its the best way to structure such a program and im willing to collaborate with any of my colleagues in the democratic republic who approve of the bell and movbilland move to do just. Today we welcome the testimony of the distinguished witnesses. The owner of the bloomberg general store on behalf of the National Retail federation. We also have john doyle president and ceo. Brian leman, the chief counsel on behalf of ap cia. Michelle, chief underwriting officer and an International Center the witnesses are reminded that your testimony wi be limit to five minutes and you should be able to see a time that will indicate how much time is left. I would ask you to be mindful if you hear the time so we can be respectful of both the witnesses and the Committee Members time. Your written statement will be made part of tecord you are now recognized for five mutes to give an oral presention of your testimony it is an honor to appear to discuss the pandemic risk from a policyholders perspective. I would like to give a special shout out and thanks to the congresswomen whove been a champion for the women owned businesses. Women owned and operated since the get go and the House Business Committee the fact that this hearing is being held shows members of Congress Care about people on main street. The National Federation 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. When my team and i discussed closing friday march h i immediately called my Insurance Company live near never steered me wrong they either follow my shop on instagram. And then moving to a new location seven years ago. I quadrupled my business. Hes always been extremely forward to help me with my business. Was 12 months of business income if i needed to shut down and also special Flood Insurance which cost 6182 annually for i also carry workers comp. With his harsh realities i quickly learned from the insurance policies like mine now wasnt considered not property damage. Now denying policyholders coverage when they needed at the most what happened to like a Good Neighbor or you are in good hands . Then i slowly realized what was happening even if i put on social media to reach out there was no relief in sight and then to how to keep on the financial obligations and figuring out our next move. The experience with the darkest of my life. Navigating the uncertainty of the business compounded by the traumatic experience hoping to get a ppp loan. We did receive a 50000 loan thanks to congress in support of the c. A. R. E. S. Act which help us to keep afloat were closed over three minutes missing easter mothers day. Share we made 166,000 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 congress to look at those businesses that were forced to close during government mandates. Also the National Retail federation not only for widespread availability but Insurance Coverage gossip or pandemic coverage. And those that were hard hit by covid19 the pandemic insurance i have a federal program to help administer Insurance Coverage model on the program that was established in 9 11 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 estions you may have. You are recognized for five minutes you may pceed. And my name is john doyle i am ceo of marsh the Worlds Largest Insurance Broker i appreciate the opportunity to speak to to ensure 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. The Publicprivate Partnership is the best for a solution and to recognize the leading role the congressmans had in the debate including introduce the legislation and compelling reasons to act now. 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 shock. If we start now we will bend the risk her for future pandemics. But by definition pandemics are global that they cannot diversify against them as of other catastrophes and the stakes around the policyholders may include businesses for all sectors are too high to defer action as he thought about a workable solution the following principles have guided us first look at Risk Mitigation how is that designed to encourage resilience to the community . For example should we incentivize prohibitive measures will be linked to ongoing government commitments next is the funding model a Publicprivate Partnership with increased private partnership at the appropriate level of industry commitment. And with the scope of coverage is that compulsory or should also be compulsory for purchase . Next is to chew on distribution to contemplate that what was required, Going Forward basis and the technology needed. Finally the claim process a solution of a welldefined trigger of relevant thresholds and specified how and when they deserve to be paid. With financial social benefits to mitigate economic losses while also providing greater certainty about sustained recovery. So which you may be asking it is complex the last several months have said those commercial Insurance Market does not fully provide businesses and others with what they need against the enormous cost of a pandemic it is rarely purchased that makes policyholders reluctant to ensure against it but at the same time explicitly include pandemic risk the main reason is sporadic and for that capacity to bear now they look to existing policies with the loss from covid19 even without specific pandemic insurance in place they will pay out tens of billions of dollars of covid19 related losses nevertheless some policyholders will be disappointed the complex nature means we need Strong National Risk Management to require insurers back to the federal government to a pandemic insurance policies and to contribute the risk knowledge and infrastructure. Widespread pandemic coverage the Publicprivate Partnership will help to facilitate coverage and then incentivize the preparedness and mitigation. And insurance product in the process associated with pandemics. With those greater economic incentives thank you look forward to your questions. Thank you and know at this time. Good morning chairman clay Ranking Memberlay bird and subCommittee Members. My ne is Michelle Mclaughlin and the chief underwritg officer for the Small Business commerci middlemarket at ch one of the largest insurers of small,edium, Large Businesses around the world thank you for inviting me to speak regardin pandemic risk that has risk sharing by the Insurance Industry my world gives me a uniquinsight into the economic effects of ndemics. And i appreciate the opportunity and is covid19 has shown but also devastating with their impact on the economy and peoples livelihoods. We believe the Insurance Industry is an Important Role to play alonide the federal government to provide sistance to blunt the Economic Impact of future pandemics. Those th are not insurable in the private Insurance Marketith other catastrophes like wildfires and hurricanes listed to specific geography or time. They can affect entire colonies in almost every business. The private insurance marke cannot underite the us economy but the Insurance Industry should have a meaningful role to provide coverage as part of a Publicprivate Partnership with a greater understanding of pandemic ri better preparedness and to create a amework to help congress think about ways to do tt the proposal has two components arounfive Key Attributes arogram that has a meaningful role for the Insurance Industry to share pandemic rk with the government and that is recognizes the immediateeed of Small Business to provide affordility and choice for Small Businesses with strong incentives with th Ins