Congresswoman Carolyn B. Maloney (D-NY) Tuesday formally introduced the Pandemic Risk Insurance Act (PRIA), the first legislation out of the gate to to tackle insurance and a bill that may be the best hope for launching new film and television production.
On a press call, Malone said her office “has been talking to a lot of people in the media concerned about event cancellations and other things” — from news media and broadcast stations to Hollywood producers. “Everyone needs insurance and they have all weighed in,” she said. Entertainment is just one of many industries gut punched by the coronavirus pandemic with much new TV and film productions potentially unable to start with the insurance needed to obtain the completion bonds that are often required for financing, as Deadline has reported.
Maloney was Zoom-flanked Tuesday by representatives of the travel, retail and nonprofit worlds and said she had well over 20 stakeholders supporting the bill. She has been talking with Republicans to find a co-sponsor and is planning to meet with Treasury Secretary Steven Mnuchin — a former investment banker active in film financing — tomorrow to discuss the legislation, which calls for a public-private partnership where the federal government would backstop 95% of pandemic-related insurance claims.
She said the initial bill is just a first salvo that she anticipates will be rewritten with input from various parties and ultimately pass because of the enormous need, expressed to her in countless town halls by all sorts of businesses. She said a proposal by the insurance industry late last week where taxpayers would fund 100% of the cost is a nonstarter (“I can tell you that is not going to pass.”) lthough it was an acknowledgement that a solution is possible and necessary.
Under her bill, the government contribution is capped at $750 billion. Deductibles are set at 5% in the bill but at this early stage “everything is negotiable” and she envisions the percentage eventually being a private agreement between insurers and policy holders.
Read the full text of the bill here.
The largest insurance industry trade groups have said pandemics are not insurable because the scope of the damage is impossible to quantify. Maloney’s bill recalls TRIA, the Terrorism Risk Insurance Act, which was hashed out over more than a year following 9-11 and has been renewed by Congress four times. “The Bush administration didn’t like it, but once we passed it, it was a success,” Maloney said.
Insurers say terrorism is limited geographically and in time and not comparable to pandemics.
Supporters of Maloney’s bill include the Council of Insurance Agents and Brokers and insurance brokerage Marsh & McLennan. She said a number of other insurance companies are also on board but didn’t give names.
“This is just the opening day. We’ll be working hard and I will be raising it this week at the leadership meeting on the Democratic side. When there is a need for it, it will happen, is my experience,” Maloney said.