In the News
Regulatory Update
Business interruption insurance task force proposed; NY addresses fast-tracking insurtechs and Florida cat fund not renewing reinsurance.
Business Interruption Insurance: The Illinois legislature has sent a bill to Gov. J.B. Pritzker that would create a task force to examine business interruption insurance and how it can be written to be more beneficial to policyholders.
The task force language was part of a much broader bill that would create a limited oversight committee reviewing Pritzker's plan to reopen the state's economy following the COVID-19 pandemic shutdown and address future similar emergencies, among other things.
A portion of S.B. 2135 would create a 10-person task force of members representing the Department of Insurance and the insurance industry to study business interruption insurance policies.
The group would study the impacts of the COVID-19 pandemic on businesses and the need for changes to business interruption insurance policies based on those impacts, including recommendations for legislation. The task force members would be unpaid and deliver a report to the governor and General Assembly by Dec. 31, it said.
According to the bill, the task force will study “the impacts of the COVID-19 pandemic on businesses and the need for changes to business interruption insurance policies based on those impacts, including recommendations for legislation.”
Participation on the task force will be voluntary.
To protect against future pandemics, businesses could obtain government-administered cover to replace a portion of their payroll, employee benefits and operating expenses in the event of a presidential viral emergency declaration, under a federal program proposed by trade representatives.
The American Property Casualty Insurance Association, along with National Association of Mutual Insurance Companies and the Independent Insurance Agents &Brokers of America Inc., proposed the Business Continuity Protection Program. It would be managed by the Federal Emergency Management Agency, with limited administrative assistance from private contractors.
“We need a sustainable solution that provides simplicity, certainty and immediate relief to impacted businesses,” said David Sampson, chief executive officer of the APCIA.
Insurtechs: The New York State Department of Financial Services has launched a new program, DFS FastForward, to support innovators seeking to deliver new solutions in financial services, insurtech, fintech and healthtech for New Yorkers in the COVID-19 era.
The New York Insurance Association welcomed the announcement as a long-desired step by the DFS to modernize.
“As New York begins re-opening, new cutting-edge and innovative solutions will be needed to adapt the New York marketplace to a new normal due to COVID-19,” said DFS Superintendent Linda Lacewell.
“DFS FastForward will help to build New York back better by supporting tomorrow's innovators for the benefit of New York's economy and consumers.”
DFS FastForward follows an insurtech pilot project dubbed “Project Whitehall,” which launched in February, through which companies and start-ups had the opportunity to connect directly with DFS subject matter experts to explore how DFS regulations might apply to their innovative, and often disruptive, insurtech solutions as they prepare to launch in New York, the department said in a statement.
DFS FastForward is open to DFS-regulated, and nonregulated, entities, as well as innovators, start-ups and disruptors looking to operate novel financial services and products in New York, the department said.
Catastrophes: The Florida Hurricane Catastrophe Fund will not renew its reinsurance program as the 2020 hurricane season gets under way, citing reduced reinsurance market capital levels.
The fund has been able to participate in the reinsurance market since 2015 without reducing the amount of capacity available to direct writers in Florida, said John Kuczwanski, manager of External Affairs for the State Board of Administration, which administers the fund.
In 2019, that reinsurance coverage amounted to $920 million, according to a fund report from February.
But with the market hardening, that well of private capital is diminished, he said.
“In the current environment, capital is less abundant than in prior years,” Kuczwanski said.
“After evaluation of this market, and in collaboration with our trusted consultants, the State Board of Administration has decided not to participate in a private reinsurance placement this year.”
