Business Interruption Relief Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 7394 To establish a temporary voluntary program for support of insurers providing business interruption insurance coverage during the COVED–19 pan- demic, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 26, 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 cov- erage during the COVED–19 pandemic, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Business Interruption 4 Relief Act of 2020’’. 5 SEC. 2. FINDINGS AND PURPOSES. 6 (a) FINDINGS.—The Congress finds that— 7 VerDate Sep 11 2014 19:14 Jul 27, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7394.IH H7394 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 7394 IH (1) mandatory civil authority shutdowns as a 1 result of the coronavirus disease 2019 (COVID-19) 2 have adversely impacted businesses throughout the 3 United States; 4 (2) the American economy relies in part upon 5 an investment in and expectation of insurance bene- 6 fits that back business assets and the workforce; 7 (3) many businesses have paid policy premiums 8 for business interruption coverage and, in particular, 9 for coverage for civil authority shutdowns of busi- 10 nesses; 11 (4) many businesses that purchased business 12 interruption coverage and coverage for civil author- 13 ity shutdowns did so in the expectation that insur- 14 ance would protect a temporary shutdown of their 15 workforce, prevent layoffs and furloughs, and allow 16 an orderly restart of operations; and 17 (5) State laws mandate an orderly and prompt 18 payment of first party insurance claims and insurers 19 have claim management resources with the expertise 20 and skills to timely manage claims payment and dis- 21 tribution of funds according to expected and relied 22 upon guidelines and procedures that policyholders 23 had the expectation to receive. 24 (b) PURPOSES.—The purposes of this Act are— 25 VerDate Sep 11 2014 19:14 Jul 27, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7394.IH H7394 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 7394 IH (1) to establish a program to encourage and 1 provide support for insurers who timely pay claims 2 under business interruption coverage to policyholders 3 adversely affected by civil authority shutdowns re- 4 sulting from the COVID-19 pandemic; and 5 (2) to establish the program in a manner that 6 ensures that— 7 (A) carriers that sold policies that cover 8 businesses interruption losses for COVID-19 do 9 not receive any Federal windfall; and 10 (B) carriers that sold policies that ex- 11 pressly exclude coverage for a virus or pan- 12 demic for COVID-19 can avoid costly litigation 13 with policyholders, and policyholders may re- 14 ceive policy benefits to compensate for govern- 15 ment shutdown and business interruption. 16 SEC. 3. PUBLIC/PRIVATE PARTNERSHIP BUSINESS INTER- 17 RUPTION INSURANCE RELIEF PROGRAM FOR 18 COVID-19. 19 (a) ESTABLISHMENT.—There is established in the 20 Department of the Treasury the Business Interruption 21 Relief Program. 22 (b) VOLUNTARY.—Participation in the Program on 23 the part of an insurer shall be voluntary at the option of 24 the insurer. 25 VerDate Sep 11 2014 19:14 Jul 27, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7394.IH H7394 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 7394 IH (c) ELIGIBLE POLICIES.—To be eligible to partici- 1 pate in the Program, an insurer shall have, as of the date 2 of initial participation in the Program, one or more out- 3 standing and existing policies of insurance issued to a pol- 4 icyholder for business interruption insurance coverage 5 that— 6 (1) expressly include coverage for losses during 7 any period of time that any civil authority shutdown 8 as a result of the COVID-19 pandemic is in effect; 9 and 10 (2) expressly exclude coverage for a ‘‘virus’’. 11 (d) ASSISTANCE.— 12 (1) REIMBURSEMENT FOR PAYMENT OF 13 CLAIMS.—Under the Program, the Secretary shall 14 provide financial assistance to reimburse any partici- 15 pating insurer that voluntarily pays benefits under 16 an eligible policy for COVID-19 losses, thereby 17 waiving the exclusion referred to in subsection 18 (c)(2), in the amount of— 19 (A) the benefit to be paid in accordance 20 with all terms of the policy; plus 21 (B) any expenses incurred by the partici- 22 pating insurer relating to paying such claim. 23 (2) PROHIBITION.—The Program shall provide 24 no benefit or reimbursement for an insurer’s pay- 25 VerDate Sep 11 2014 19:14 Jul 27, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7394.IH H7394 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 7394 IH ment and claim expenses for benefits paid under any 1 policy for business interruption coverage that does 2 not expressly exclude coverage for a ‘‘virus’’. 3 (3) TREATMENT OF RIGHTS AND DUTIES.— 4 (A) POLICYHOLDERS.—Policyholders 5 under policies for which reimbursement is pro- 6 vided under the Program shall retain all first 7 party rights to policies for business interruption 8 insurance coverage. 9 (B) STATE LAW.—Participation in the 10 Program by an insurer shall not supersede or 11 replace any rights of good faith and fair duty 12 under State insurance law. 13 (4) COMPLIANCE.—The Secretary shall take 14 any such actions as may be necessary, before pro- 15 viding any assistance pursuant to paragraph (1) to 16 a participating insurer, that the participating in- 17 surer makes payment to policyholders in compliance 18 with the terms and conditions of the policies referred 19 to in subsection (c). 20 (e) LIMITATION ON ASSISTANCE FOR A PARTICI- 21 PATING INSURER.—The Secretary shall limit the amount 22 of assistance provided for a participating insurer under 23 the Program under this section according to the limits of 24 the eligible policies involved. 25 VerDate Sep 11 2014 19:14 Jul 27, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7394.IH H7394 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 7394 IH (f) DEFINITIONS.—For purposes of this section, the 1 following definitions shall apply: 2 (1) BUSINESS INTERRUPTION INSURANCE COV- 3 ERAGE.—The term ‘‘business interruption insurance 4 coverage’’ means property and casualty insurance 5 coverage provided or made available for losses result- 6 ing from periods of suspended business operations, 7 whether provided under broader coverage or sepa- 8 rately. 9 (2) CIVIL AUTHORITY SHUTDOWN.—The term 10 ‘‘civil authority shutdown’’ means forced closure of 11 businesses, or evacuation, by mandate, law, or order 12 of any State or local government or governmental of- 13 ficer or agency. 14 (3) COVID-19 LOSSES.—The term ‘‘COVID-19 15 losses’’ means for losses resulting from business 16 interruption due to a civil authority shutdown as a 17 result of the COVID-19 pandemic. 18 (4) ELIGIBLE POLICY.—The term ‘‘eligible pol- 19 icy’’ means a policy for business interruption insur- 20 ance coverage described in section 3(c). 21 (5) INSURER.—The term ‘‘insurer’’ has the 22 meaning given such term in section 102 of the Ter- 23 rorism Risk Insurance Act of 2002 (15 U.S.C. 6701 24 note). 25 VerDate Sep 11 2014 19:14 Jul 27, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7394.IH H7394 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 7394 IH (6) PARTICIPATING INSURER.—The term ‘‘par- 1 ticipating insurer’’ means an insurer that— 2 (A) has voluntarily elected, in accordance 3 with such procedures and requirements as the 4 Secretary shall establish, to participate in the 5 Program; and 6 (B) is in compliance with the requirements 7 under this section for participation in the Pro- 8 gram. 9 (7) PROGRAM.—The term ‘‘Program’’ means 10 the Business Interruption Relief Program estab- 11 lished under this section. 12 (g) REGULATIONS.—The Secretary shall issue any 13 regulations necessary to carry out the Program. 14 (h) FUNDING.—There is authorized to be appro- 15 priated such sums as may be necessary for providing fi- 16 nancial assistance under the Program to participating in- 17 surers. 18 Æ VerDate Sep 11 2014 19:14 Jul 27, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H7394.IH H7394 pamtmann on DSKBC07HB2PROD with BILLS