The proposal, which would create insurance to cover pandemics and other public health crises, would be funded both by the federal government and major providers.
U.S. Rep. Carolyn Maloney (D-NY) has introduced the Pandemic Risk Insurance Act of 2020 after discussions with studios, producers and news media, she said Tuesday.
"We have been talking to a lot of people in the media. They are concerned about event cancellations and other things. They have expressed interest, very much so," Maloney said during Tuesday afternoon's press call. She added, "We've talked to [studios], too, they're interested, too, and news media, news stations and Hollywood producers. ... They've all weighed in in certain ways." Maloney did not say whether any specific provisions in the bill was tailored to the entertainment industry.
PRIA calls for the creation of the Pandemic Risk Reinsurance Program, which would pull from public and private funding sources in order to cover business losses from pandemics or other public health emergencies, which are not currently covered by insurance. The current draft sets up a system wherein businesses can purchase pandemic insurance with deductibles and premiums and, if a public health emergency were to strike, the federal government and insurance companies that elect to join the program would share the financial responsibility for protecting policyholders up to $750 billion. Notably, the Pandemic Risk Reinsurance Program would cover event cancellation as a viable form of business loss. The deductible proposed is roughly five percent.
Over two dozen national business and trade associations support the bill, Maloney said, including the National Retail Federation, Nonprofit New York and the U.S. Travel Association, whose representatives were on the call. "We all recognize that pandemics are unique and the economic effects of pandemics would be devastating, so without a backstop it's not clear whether insurers could or would cover pandemics," she added.
Last week, two insurance carrier groups and an association of insurance agents proposed their own federal pandemic relief program called the Business Continuity Protection Program. That program would have businesses purchase federal revenue replacement assistance that, in the event of a public health emergency, would come from FEMA and cover up to 80 percent of losses.
When asked about insurance companies' opposition to sharing the costs of pandemic insurance, Maloney said that Marsh & McLennan Companies has publicly supported the bill and "there's always room for compromise. I think that's what legislation is about."
As for Republican support for the bill, Maloney noted that proposed legislation had just been introduced and that she has a call with U.S. Secretary of the Treasury Steven Mnuchin this week.
The lack of insurance for business losses as a result of the coronavirus pandemic has stymied the entertainment industry's effort to formulate a plan to return to work: Few companies seem willing to move forward with production without insurance protection, even at big studios, which could self-insure or potentially foster a liability-sharing agreement. One exception? A Universal Pictures and Jason Blum low-budget film currently in the works that would shoot on the studio lot with specific protocols in place to prevent the virus' spread.
The Hollywood Reporter previously reported that the MPA and the Independent Film & Television Alliance have been advocating for federal help in gaining insurance on productions, while DeWitt Stern Risk Strategies insurance brokerage managing director Peter A. Marshall was helping to craft language regarding media production for the bill. When reached by THR, Marshall said he didn't believe that language was included in the first draft, although it might be added if the draft goes to committee.
