Title: Business Interruption Relief Act of 2020
Policy area: Finance and Financial Sector

Summary:
Business Interruption Relief Act of 2020
This bill establishes the Business Interruption Relief Program within the Department of the Treasury to provide financial assistance to insurers that voluntarily pay benefits under certain policies for COVID-19 (i.e., coronavirus disease 2019) losses. Specifically, insurers qualify for the program if the insurer has at least one outstanding and existing policy for business interruption coverage that (1) expressly covers losses during a civil authority shutdown as a result of the COVID-19 pandemic, and (2) expressly excludes coverage for a virus. Participation in the program is voluntary.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7412 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 7412

  To establish a temporary voluntary program for support of insurers 
providing business interruption insurance coverage during the COVID-19 
                   pandemic, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 29, 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 coverage during the COVID-19 
                   pandemic, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Business Interruption Relief Act of 
2020''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) mandatory civil authority shutdowns as a result of the 
        coronarvirus disease 2019 (COVID-19) have adversely impacted 
        businesses throughout the United States;
            (2) the American economy relies in part upon an investment 
        in and expectation of insurance benefits that back business 
        assets and the workforce;
            (3) many businesses have paid policy premiums for business 
        interruption coverage and, in particular, for coverage for 
        civil authority shutdowns of businesses;
            (4) many businesses that purchased business interruption 
        coverage and coverage for civil authority shutdowns did so in 
        the expectation that insurance would protect a temporary 
        shutdown of their workforce, prevent layoffs and furloughs, and 
        allow an orderly restart of operations; and
            (5) State laws mandate an orderly and prompt payment of 
        first party insurance claims and insurers have claim management 
        resources with the expertise and skills to timely manage claims 
        payment and distribution of funds according to expected and 
        relied upon guidelines and procedures that policyholders had 
        the expectation to receive.
    (b) Purposes.--The purposes of this Act are--
            (1) to establish a program to encourage and provide support 
        for insurers who timely pay claims under business interruption 
        coverage to policyholders adversely affected by civil authority 
        shutdowns resulting from the COVID-19 pandemic; and
            (2) to establish the program in a manner that ensures 
        that--
                    (A) carriers that sold policies that cover business 
                interruption losses for COVID-19 do not receive any 
                Federal windfall; and
                    (B) carriers that sold policies that expressly 
                exclude coverage for a virus or pandemic for COVID-19 
                can avoid costly litigation with policyholders, and 
                policyholders may receive policy benefits to compensate 
                for government shutdown and business interruption.

SEC. 3. PUBLIC/PRIVATE PARTNERSHIP BUSINESS INTERRUPTION INSURANCE 
              RELIEF PROGRAM FOR COVID-19.

    (a) Establishment.--There is established in the Department of the 
Treasury the Business Interruption Relief Program.
    (b) Voluntary.--Participation in the Program on the part of an 
insurer shall be voluntary at the option of the insurer.
    (c) Eligible Policies.--To be eligible to participate in the 
Program, an insurer shall have, as of the date of initial participation 
in the Program, one or more outstanding and existing policies of 
insurance issued to a policyholder for business interruption insurance 
coverage that--
            (1) expressly include coverage for losses during any period 
        of time that any civil authority shutdown as a result of the 
        COVID-19 pandemic is in effect; and
            (2) expressly exclude coverage for a ``virus''.
    (d) Assistance.--
            (1) Reimbursement for payment of claims.--Under the 
        Program, the Secretary shall provide financial assistance to 
        reimburse any participating insurer that voluntarily pays 
        benefits under an eligible policy for COVID-19 losses, thereby 
        waiving the exclusion referred to in subsection (c)(2), in the 
        amount of--
                    (A) the benefit to be paid in accordance with all 
                terms of the policy; plus
                    (B) any expenses incurred by the participating 
                insurer relating to paying such claim.
            (2) Prohibition.--The Program shall provide no benefit or 
        reimbursement for an insurer's payment and claim expenses for 
        benefits paid under any policy for business interruption 
        coverage that does not expressly exclude coverage for a 
        ``virus''.
            (3) Treatment of rights and duties.--
                    (A) Policyholders.--Policyholders under policies 
                for which reimbursement is provided under the Program 
                shall retain all first party rights to policies for 
                business interruption insurance coverage.
                    (B) State law.--Participation in the Program by an 
                insurer shall not supersede or replace any rights of 
                good faith and fair duty under State insurance law.
            (4) Compliance.--The Secretary shall take any such actions 
        as may be necessary, before providing any assistance pursuant 
        to paragraph (1) to a participating insurer, that the 
        participating insurer makes payment to policyholders in 
        compliance with the terms and conditions of the policies 
        referred to in subsection (c).
    (e) Limitation on Assistance for a Participating Insurer.--The 
Secretary shall limit the amount of assistance provided for a 
participating insurer under the Program under this section according to 
the limits of the eligible policies involved.
    (f) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Business interruption insurance coverage.--The term 
        ``business interruption insurance coverage'' means property and 
        casualty insurance coverage provided or made available for 
        losses resulting from periods of suspended business operations, 
        whether provided under broader coverage or separately.
            (2) Civil authority shutdown.--The term ``civil authority 
        shutdown'' means forced closure of businesses, or evacuation, 
        by mandate, law, or order of any State or local government or 
        governmental officer or agency.
            (3) COVID-19 losses.--The term ``COVID-19 losses'' means 
        for losses resulting from business interruption due to a civil 
        authority shutdown as a result of the COVID-19 pandemic.
            (4) Eligible policy.--The term ``eligible policy'' means a 
        policy for business interruption insurance coverage described 
        in section 3(c).
            (5) Insurer.--The term ``insurer'' has the meaning given 
        such term in section 102 of the Terrorism Risk Insurance Act of 
        2002 (15 U.S.C. 6701 note).
            (6) Participating insurer.--The term ``participating 
        insurer'' means an insurer that--
                    (A) has voluntarily elected, in accordance with 
                such procedures and requirements as the Secretary shall 
                establish, to participate in the Program; and
                    (B) is in compliance with the requirements under 
                this section for participation in the Program.
            (7) Program.--The term ``Program'' means the Business 
        Interruption Relief Program established under this section.
    (g) Regulations.--The Secretary shall issue any regulations 
necessary to carry out the Program.
    (h) Funding.--There is authorized to be appropriated such sums as 
may be necessary for providing financial assistance under the Program 
to participating insurers.
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