PANDEMIC RESPONSE REVENUE REPLACEMENT MECHANISMS

Issue Business Continuity Protection 

Program (BCPP-Plus)

Policyholder Community 

Proposal (BCC)

PRIA -- Rep. Maloney Chubb – Part I, Business 

Expense Insurance Program 

(BIP) for smaller businesses; 

Part II, Pandemic Re, for 500+

employees organizations

Zurich Draft Concept

Product Design Business revenue 

reimbursement program; not an 

insurance product

Creates Federal Pandemic 

Insurance Corporation (FPIC) 

that reinsures:

(1) Business Expense Insurance 

Program – an insurance 

product (BIP)

(2) Other covered lines 

including event cancellation

Designed as an “amendment in 

the form of a substitute for H.R. 

7011”

Incorporated as part of private 

business interruption insurance 

(BI)

Part I (BIP):

Added to existing business 

owners or workers 

compensation insurance policy

Part II (Pandemic Re): 

Government reinsured business 

interruption coverage on 

modified standard industry 

forms

Based on the Federal Crop 

Insurance Program.

Insurance program which 

creates three federally backed 

insurance pools, with an option 

for insurers to offer a 100% 

federally guaranteed product 

carried on insurer paper.

Insurers determine which risks

to place on a policy-by-policy 

basis in which pool based on 

their risk appetite. Insurers can 

place all risks in 100% federal 

guaranteed pool. Each 

commercial risk would be 

individually placed.

Ceding commissions set by 

reinsurance pool equally across 

all carriers, with the 100% 

ceded pool paying the lowest 

ceding commission and the 90% 

ceded pool paying the highest.

Business 

Eligibility for

Participation

Any firm incorporated in the US 

or US territory w/bona fide

operations in the US. For-profit

Any commercial or non-profit 

policyholder that accepts the

Any business policyholder that 

accepts the offer of BI coverage

from a participating insurer

Part I (BIP): Any firm incorporated in the US 

or US territory w/bona fide

operations in the US. For-profit
2

Issue Business Continuity Protection 

Program (BCPP-Plus)

Policyholder Community 

Proposal (BCC)

PRIA -- Rep. Maloney Chubb – Part I, Business 

Expense Insurance Program 

(BIP) for smaller businesses; 

Part II, Pandemic Re, for 500+

employees organizations

Zurich Draft Concept

and non-profit entities, no size 

limitation.

offer of BI insurance coverage 

from a participating insurer or 

BEI Pool

Businesses with fewer than 500 

employees and a valid Federal 

Tax ID.

Part II (Pandemic Re): 

Businesses with more than 500 

employees and a valid Federal 

Tax ID

and non-profit entities, no size 

limitation.

Insurer 

Participation

Federal program sold on a 

voluntary basis by agents and 

brokers. Insurers and other thirdparty entities would provide 

administration services.

No policy of commercial multiperil or similar property 

insurance may be issued or 

delivered or, renewed by any 

PRIA-eligible insurer unless 

named insured is offered 

coverage substantially 

equivalent to BIP Parametric 

Insurance Policy. Insurer could 

also satisfy this requirement by 

arranging affiliate to insure or 

by supporting BEI Pool and 

making available to insured.

(1) Licensedinsurance 

companies;

(2) Federally approved 

specialty carriers;

(3) Residual market operators;

(4) State WC funds 

Participating insurers must offer 

viral BI coverage on the same 

terms and conditions as 

underlying coverage in covered 

lines

Part I (BIP):

All P&C insurers issuing business 

insurance coverage for the 

covered lines and mandatory 

offer (earlier documents and 

graphics specify that the 

mandatory offer would be tied 

to workers compensation and 

BOP policies)

Part II (Pandemic Re): 

Federally reinsured program 

sold on a voluntary basis.

Mandatory offer by insurers 

providing property insurance

Insurers cede policies to the 

federal government in one of 

three pools: 100%, 95% or 90%.

Program

Trigger

(1) State governor requests

Presidential declaration of 

“viral emergency” due to 

state-mandated closure;

(2) Presidential viral emergency 

declaration; and

(3) Closure applies to the type

of business (using identified 

NAICS codes)

(1) States can request a federal

public health emergency 

declaration because of viral 

infection

(2) Presidential emergency 

declaration; and

(3) Closure applies to the 

business (using identifiedNAIC

codes)

(1) Specific outbreak of

infectious disease or 

pandemic for which a 

Covered Public Health 

Emergency is declared by 

HHS Secretary under the 

PHSA

Part I (BIP):

(1) CDC declaration of 

pandemic;

(2) Public Health Declaration by 

HHS or Emergency 

Declaration by POTUS; and

(3) State orders are in force 

that close and/or curtail

normal business activity

Tiered parametric trigger based

on state ordered business 

closures and a federal 

emergency disaster declaration. 

Federal emergency disaster 

declaration must be declared 

for the individual state.
3

Issue Business Continuity Protection 

Program (BCPP-Plus)

Policyholder Community 

Proposal (BCC)

PRIA -- Rep. Maloney Chubb – Part I, Business 

Expense Insurance Program 

(BIP) for smaller businesses; 

Part II, Pandemic Re, for 500+

employees organizations

Zurich Draft Concept

(2) $250 million in insured 

losses across participating 

insurers

(4) Excludes COVID-19

Part II (Pandemic Re):

(1) CDC declaration of 

pandemic;

(2) Public Health Declaration by 

HHS or Emergency 

Declaration by POTUS; and

(3) State orders are in force 

that close and/or curtail 

normal business activity

(4) Excludes COVID-19

Administration Treasury Treasury Treasury Treasury Federal

Mandatory

Issue

Yes – from Federal Government Participation is mandatory for 

fixed property insurers, but they 

may satisfy requirement by 

supporting BEI Pool (nonrecourse) through purchase of 

surplus notes.

BEI Pool governed by subscribing 

insurers subject to disapproval by 

Treasury (also on board); Pool 

provided 80% quota share plus

stop-loss R/I by FPIC.

Participation is voluntary for 

insurers, but participating 

insurers must offer BI covered 

for covered lines on the same 

terms and conditions as 

underlying non-viral coverage

Part I (BIP):

Yes – by any insurer issuing 

business insurance coverage 

(again, earlier documents and 

graphics specify that the 

mandatory offer would be tied 

to workers compensation and 

BOP policies)

Part II (Pandemic Re):

No – Participation is voluntary.

Participation is mandatory for 

fixed property insurers, but they 

may offer a 100% federally 

backed product.

Guaranteed 

Renewal

Yes – with updated tax 

information.

Same as PRIA Participating insurers must reoffer pandemic coverage 

annually if they are offering 

underlying coverage in covered

lines

? – Annual renewal is 

contemplated, but unclear 

whether guaranteed.

N/A
4

Issue Business Continuity Protection 

Program (BCPP-Plus)

Policyholder Community 

Proposal (BCC)

PRIA -- Rep. Maloney Chubb – Part I, Business 

Expense Insurance Program 

(BIP) for smaller businesses; 

Part II, Pandemic Re, for 500+

employees organizations

Zurich Draft Concept

Time Frame Available six (6) months after 

date of enactment; certificate is 

valid for one (1) year. Purchase 

must occur 90 days prior to any 

formal declaration of viral 

emergency.

14-day waiting period after 

qualifying event

Covers public health 

emergencies commencing after 

Treasury regulations are 

promulgated. Covers all claims 

during the period when Covered 

Public Health Emergency is in

effect.

Part I (BIP):

14-day waiting period after 

qualifying event

Part II (Pandemic Re):

30-day waiting period (or

longer) after qualifying event

Business deductible based on an 

unspecified waiting period (“x 

days”).

Private sector 

retention 

(Basic and 

Excess)

No private sector retention for 

primary protection program.

Title II

Designed for larger businesses 

which may be concerned about 

caps and limits in the primary 

program.

• Participation voluntary for 

both insurers and 

purchasing businesses. 

Businesses would need to 

participate in the BCPP to 

participate in the excess 

coverage program.

• Broad cross section of 

insurers eligible to 

participate including those 

admitted in any state and 

non-admitted insurers that 

are eligible surplus lines 

insurers. Treasury could

apply the program to

Participating insurers could 

offer BIP coverage with:

• 95% federal reinsurance

• 90% federal reinsurance

If second major event in the 

same calendar year, co-share reset lower.

Alternatively, if insurer 

subscribes to BEI Pool surplus 

notes, insurer may offer its 

insureds Pool coverage in lieu of 

writing directly.

Title II

For excess BI and other covered 

lines (ECI, cast insurance, WC, GL 

and PI), PRIA-eligible insurers will 

be offered FPIC reinsurance of 

90% plus certain stop-loss to 

encourage market

Potential $47.5 billion exposure 

annually;

• Insurers 100% responsible 

for events of $250 million or 

less (i.e. losses below 

ProgramTrigger)

• Insurers also responsible for 

their insurer deductible = 

5% of prior year’s DEP in 

covered lines (potential

$10b aggregate)

• Insurers also responsible for 

5% co-share of losses above 

insurer deductible, up to

$750b aggregate loss cap 

(potential $37.5b 

aggregate)

• 7-year sunset

Part I (BIP):

$15 Billion in year 1.

• Increases by $0.75 Billion 

annually until year 20.

• $30 Billion over the 

program

• Insurer pays 6% of first–

dollar claims up to insurer’s 

market share of industry 

limit, growing to 12% by 

year 20.

Part II (Pandemic Re):

$15 Billion in year 1.

• Increases by $1.5 Billion 

annually until year 10.

• $30 Billion over the 

Program

• Insurer pays 5% of first–

dollar claims until industry 

limit ($15b) is reached, 

growing to 10% by year 10

Creates three reinsurance pools 

in a private/public partnership:

• 100% federally insured

• 95% government co-share, 

5% insurer co-share

• 90% government co-share, 

10% insurer co-share

No minimum reinsurance 

placement requirements by 

pool/treaty. No reinsurance 

caps or aggregates.
5

Issue Business Continuity Protection 

Program (BCPP-Plus)

Policyholder Community 

Proposal (BCC)

PRIA -- Rep. Maloney Chubb – Part I, Business 

Expense Insurance Program 

(BIP) for smaller businesses; 

Part II, Pandemic Re, for 500+

employees organizations

Zurich Draft Concept

captives and other selfinsurance arrangements.

• Excess coverage program 

protected by a 90% Federal 

backstop with insurers 

assuming 10% of annual risk 

for each policy.

• Program subject to 

reauthorization with sunset 

in 2030.

What is being 

offered?

• BCPP– Title I - Up to 80% 

revenue replacement for a 

maximum of three (3) 

months with the limit 

chosen by policyholder. 

Other option to be 

developed by director.

• Title II – Excess coverage for 

larger businesses and must 

purchase basic BCPP

• Title II - Contemplates 

Treasury Department 

design of event cancellation 

revenue replacement 

protection to fit within 

primary and excess

programs.

• For SMEs: Parametric 

insurance coverage for up 

to 80% of 3-months’ 

operating expenses 

(following 14 day waiting 

period)

• For larger businesses: 

coverage decreasing to 50% 

replacement for 

policyholders with larger 

operating budgets (i.e., 

policyholder retentions).

Business Interruption ins., that 

includes event cancellation 

insurance or other non-property 

contingent business 

interruption insurance on same 

terms and conditions as 

underlying BI for covered lines

Part I (BIP):

Up to three (3) months of 

payroll, based on a multiple of 

monthly payroll expenses

Part II (Pandemic Re):

Up to three (3) months of 

expenses, with $50 million 

maximum per policyholder

Up to 80% of business expenses 

over three months capped at

$20 million per month for 

employers with 500 or more 

employees.

Eligible 

Expenses

Ordinary payroll and employee 

benefits;

Payments to vendors & 3PK’s;

Between 50-80% of operating 

expenses depending on the size 

of the entity. Operating 

expenses include:

Any loss resulting from a 

covered public health 

emergency that is covered by 

primary or excess BI insurance

Part I (BIP):

Ordinary payroll and operating 

costs

Support covers business 

financial obligations:

• Payroll

• Employee Benefits
6

Issue Business Continuity Protection 

Program (BCPP-Plus)

Policyholder Community 

Proposal (BCC)

PRIA -- Rep. Maloney Chubb – Part I, Business 

Expense Insurance Program 

(BIP) for smaller businesses; 

Part II, Pandemic Re, for 500+

employees organizations

Zurich Draft Concept

Rent, mortgage, other loan 

obligations;

Equipment rental and 

maintenance;

Taxes and insurance;

Other categories promulgated

by rule.

Payroll; 

Rent; 

Utilities; 

Insurance; 

Taxes;

Other fixed operating costs.

Part II (Pandemic Re): 

Any expenses

• Interest Payment

• Rent

• Accounts Payable

• Taxes

Conditions • Businesses certify they will 

only use funds for allowed 

purposes (e.g., retaining 

employees and paying 

necessary operating 

expenses)

• Program may audit postpayments

• Applicants certify they will 

only use funds for allowed 

purposes (e.g., retain 

employees and pay 

operating expenses)

• Program may audit postpayments

Terms and conditions of offer of 

viral BI coverage must match 

underlying BI coverage

Part I (BIP):

Standard terms and conditions 

of the underlying policy unless 

modified

Part II (Pandemic Re): 

Standard terms and conditions

of the underlying policy

Business self certifies losses to 

the government (e.g., via tax 

filings).

Partial 

Operations

• Presidential declarations 

indicate which businesses 

can remain open or partially 

open (for partial payments) 

based on gubernatorial 

request

• Director to determine a 

formula based onpartially 

open

• Presidential declarations 

indicate which businesses 

can remain open or partially 

open – and

• 14-day waiting period 

included along with 25% 

revenue loss certification

Participating insurers may 

purchase commercial 

reinsurance to protect their 

retentions

Application 

Process

(1) Form developed by director, 

requiring up to two years of 

tax returns to determine 

expected assistance benefit; 

businesses with physical 

locations in multiple states

(1) Form developed by director,

(2) Businesses with physical 

locations in multiple states 

would specify allocation of 

risk at purchase

(3) NAICS six-digit classification 

code

Treasury to develop a process 

by which insurers elect to 

participate for each calendar 

year.

Business works with existing 

property broker/agent to 

voluntarily select coverage 

level.
7

Issue Business Continuity Protection 

Program (BCPP-Plus)

Policyholder Community 

Proposal (BCC)

PRIA -- Rep. Maloney Chubb – Part I, Business 

Expense Insurance Program 

(BIP) for smaller businesses; 

Part II, Pandemic Re, for 500+

employees organizations

Zurich Draft Concept

would specify allocation of 

risk at purchase

(2) NAICS six-digit classification 

code

(3) Attestation byowner

(4) Attestation by owner

Payment 

Process

Parametric trigger starts 

formulaic payments. No claim 

adjudication necessary.

Payments on day 1, day 30, and 

day 60 following Presidential 

declaration.

Parametric trigger starts 

formulaic payments. 14-day 

waiting period + 25% loss 

certification.

Person suffering covered loss 

files claim with insurer, who 

processes and submits to 

Treasury with written 

certifications of payments 

already made for insured losses. 

Treasury to issue additional 

rules and procedures for claims 

and payments.

Part I (BIP):

Parametric trigger starts 

formulaic payments. No claim 

adjudication necessary.

Insurers drawdown a line of 

credit for Government’s share 

of payments from US Treasury.

Part II (Pandemic Re):

Company suffering covered loss 

files claim with insurer, who 

processes and submits to 

Pandemic Re following

adjustment process.

Parametric trigger starts 

formulaic payments subject to 

applicable deductible waiting 

periods. No claim adjudication 

necessary. Insurers drawdown 

a line of credit for government’s 

share of payments from US 

Treasury.

Oversight Annual audit and accounting of 

funds;

Audit and clawback capability 

for benefits not applied to 

allowable categories; Expenses 

must be documented; 

Knowing fraud results in 

expulsion, penalties, fines, and 

potential jail time.

Audit and claw-back capability 

for benefits not applied to 

allowable categories

Participating insurers must 

submit to Treasury: lines 

exposed, premiums earned, 

geographical location, pricing, 

take up rate, reinsurance, and 

other matters deemed 

appropriate. Extensive 

reporting to Congress by 

Treasury.

Part I (BIP):

Policyholder certification and 

federal tax return filing process 

subject to IRS audit

Part II (Pandemic Re): 

Insurer claims adjudication 

process

Federal government establishes 

a framework for monitoring 

fraud, waste, and abuse of the 

federal program.

Any private products regulated 

at the federal level using a 

single set of rules governed at 

the federal level (preempting 

regulatory and liability state 

laws). Not subject to state 

premium tax laws.
8

Issue Business Continuity Protection 

Program (BCPP-Plus)

Policyholder Community 

Proposal (BCC)

PRIA -- Rep. Maloney Chubb – Part I, Business 

Expense Insurance Program 

(BIP) for smaller businesses; 

Part II, Pandemic Re, for 500+

employees organizations

Zurich Draft Concept

Mandatory

Purchase

None (although some lenders 

may want to see protection)

Not mandatory, but 

policyholders that decline BIP 

coverage must acknowledge 

they will not be covered for 

pandemic BI losses and that 

they may not be eligible for 

Federal pandemic disaster 

assistance

None. Businesses may purchase 

with other coverage in covered 

lines

Part I (BIP):

Not mandatory, but “strong optout” requirement. Businesses 

who do not want the coverage 

must decline it and acknowledge 

they will be ineligible for federal 

program benefits.

Part II (Pandemic Re): 

None.

None

Pricing Rate determined by Treasury, 

uniform% of revenue to be 

replaced plus administrative 

costs; director to develop 

minimums and payment plan 

options; aggregated data on 

prices and payments to be 

publicly available.

Rating handbook for 

participating insurers to be 

developed by FPIC in 

consultation with actuarial 

societies and NAIC

Pricing based upon 

intergenerational spread of 

pandemic cost and to encourage 

participation; payroll feature to 

be subsidized by Federal 

resources

Discount for risk mitigation

Rate determined by insurers 

subject to state regulatory rate 

and form approval as 

applicable.

Part I (BIP):

“Risk appropriate” premium for 

insurer’s share – no premium 

for Government’s share.

Part II (Pandemic Re):

“Risk appropriate” premium for 

insurer’s and Government’s 

reinsurance share, collected by 

insurers. Insurers retain 

proportional share and cede 

balance to Pandemic Re for

government share.

Rates set by the federal 

government. Premium 

subsidized federally and based 

on indexed approach by 

industry and region.

2% rate-on-line (ROL) for <500

employee, 3% for 500 or more.

0.5% preferred risk discount for 

qualifying risk mitigation 

programs.

Restrictions Owner’s attestation includes 

future compliance with CDC, 

OSHA, and other specified 

guidelines; funds must be used 

to retain employees and keep 

business viable.

Requires certification by the 

business that it will only use 

funds for operating expenses 

and employee retention.

None Part I (BIP):

Policyholders must continue 

payroll – no layoffs.

Part II (Pandemic Re): 

None.

None
9

Issue Business Continuity Protection 

Program (BCPP-Plus)

Policyholder Community 

Proposal (BCC)

PRIA -- Rep. Maloney Chubb – Part I, Business 

Expense Insurance Program 

(BIP) for smaller businesses; 

Part II, Pandemic Re, for 500+

employees organizations

Zurich Draft Concept

Product 

Distribution

Licensed insurance agents and 

brokers

Licensed insurance agents and 

brokers and participating

insurers

Licensed insurance agents and 

brokers and participating

insurers

Licensed insurance agents and 

brokers and participating

insurers

Licensed insurance agents and 

brokers

Aggregate limit None None? $750 Billion annually Part I (BIP):

$750 Billion annually

Part II (Pandemic Re):

$400 Billion annually

None

Funding In years without losses, funds 

can purchase Treasury 

securities; if exposure exceeds 

assets, the program may 

borrow from Treasury to pay 

recorded losses.

Line of credit established by the 

Federal Reserve Bank of New 

York for participating insurers 

and pools to access for FPIC 

payouts.

Appropriated funds as may be 

necessary for insured losses and 

administrative costs

Part I (BIP):

Treasury establishes a line of 

credit facility with participating 

insurers as beneficiaries for 

government share of losses.

Part II (Pandemic Re): 

Establishes a line of credit 

facility with participating 

insurers as beneficiaries for 

government share oflosses.

Federal government financially 

supports.

Mitigation and 

Risk 

Management

• Business attests to 

compliance with CDC, 

OSHA, pandemic 

requirements

• Leverages insurance 

industry capabilities with 

access to IBHS “Open for 

Business EZ” tools

None? None None stated Preferred risk discount offered 

for qualifying risk mitigation 

programs. Expectation of 30% 

of businesses would qualify for 

the 0.5% discount.

Risk mitigation consultation and 

services (e.g., resilience 

planning) conducted by carrier.

Claims 

Adjudication

None-

• Parametric trigger

• Formulaic payment

BIP-

• 14-day waiting period

Traditional insurance claims 

adjustment process

Part I (BIP):

None-

• Parametric trigger

None-

• Parametric trigger

• Formulaic payment
10

Issue Business Continuity Protection 

Program (BCPP-Plus)

Policyholder Community 

Proposal (BCC)

PRIA -- Rep. Maloney Chubb – Part I, Business 

Expense Insurance Program 

(BIP) for smaller businesses; 

Part II, Pandemic Re, for 500+

employees organizations

Zurich Draft Concept

• Parametric trigger

• Formulaic payment

• Formulaic payment 

Part II (Pandemic Re): 

Traditional insurance claims 

adjustment process

Business self certifies losses to 

the government (e.g., via tax 

filings).

Cap • 3 months expenses based 

on co-pay

• Limited by protection % (up 

to a maximum of 80 

percent) chosen by 

purchaser

• 3 months expenses based 

on co-pay

• BIP limited by protection % 

(up to a maximum of 80 

percent) for SMEs chosen 

by purchaser

• BIPfurther limited for larger 

businesses up to a 

maximum of 50 percent

• $750b cap on 

industry/government 

combined payments

• If Treasury estimates that 

insured losses may exceed 

the cap, Treasury 

establishes an interim pro 

rata loss percentage 

reducing compensation to 

policyholders who have not 

yet been paid by insurers;

• Treasury can call a brief 

hiatus in insurer loss 

payments of up to two 

weeks to determine a 

subsequent pro rata loss 

percentage rate that 

insurers would then apply

• Depending on when a 

policyholder files a claim 

and how quickly the insurer 

provides payment, if the 

cap is exceeded, the 

policyholder may receive 

full compensation partial, or

none.

$20 million per month for 

employers with more than 500 

employees. 80% of eligible 

expenses for all policyholders 

for three months.