Senate Banking Committee Convenes to Discuss Frameworks to Address Future Pandemic Risk
The Business Continuity Coalition (BCC) participated in a hearing July 22 titled “Examining Frameworks to Address Future Pandemic Risk” held by the United States Senate Committee on Banking, Housing and Urban Affairs. At the hearing, the BCC was represented by Charles Landgraf from Arnold & Porter.
During his prepared testimony, Landgraf addressed the group and said, “Now is the time for Congress and America’s world-class insurance industry to act boldly -- with policyholders and taxpayers -- to co-create a public-private partnership. The COVID pandemic exposed and indeed exacerbated a crippling “protection gap” (or gaps) in what the business and non-profit sectors had rightly or wrongly assumed to be a resilient financial protection system of commercial insurance. The business interruption coverage proved elusive, and coverage in other lines of insurance has been withdrawn or restricted going forward.”
He emphasized how the BCC brings many voices to the policy discussion with 44 trade associations and major companies across many sectors of the economy representing more than 70 million workers, from healthcare and dining/hospitality – the two largest employment sectors in the economy – to manufacturing, construction, finance, real estate, media and film, live entertainment, professional sports, and professional services, to name some of the sectors represented in the BCC.
Landgraf also acknowledged the BCC’s understanding that the U.S. government and governments around the world are still dealing with recovery from the pandemic, but explained that now is the time to repair and improve the protection fabric for the economy and for jobs. He emphasized that the BCC is seeking to restore “good-quality insurance” that meets the needs of the real economy and ultimately with a more authentic alignment of expectations between businesses and insurers.
In addition to Landgraf representing the BCC, the National Restaurant Association (a BCC member) brought Ms. Adenah Bayoh, IHOP Franchisee and owner of several restaurants, to the hearing so she could explain how she found out at the beginning of the COVID crisis that her business interruption insurance, which cost her an average of $ 275,000 annually in premiums, did not apply to viruses and pandemics and she would receive no relief from her insurance companies even though her business was interrupted by the virus and required to be closed by the Governor of New Jersey.
In her statement, Bayoh spoke about her journey to become a small business owner and how she approached caring for her employees at the onset of the COVID-19 crisis. She stated, “At the outset of the crisis, I struggled to continue paying my employees from proceeds generated by the business given the mandated shutdown and the fear that gripped the dining public in those early days. Nevertheless, I made a courageous decision for the first month of the statewide shutdown to continue paying my employees despite the precarious situation. I agreed to pay all my employees their average weekly pay whether they worked or not. I did this to ensure that my staff, including single mothers, could put food on the table. Although I was unable to fully resume normal business operations, I felt a duty to help our valued team members until government programs could fill the gap. As an owner of several restaurants, I was nearly bankrupted by this, but I have no regrets.” Her moving testimony can be read in full (PDF).
Other participants in the July 22 hearing included:
Mr. Evan G. Greenberg, Chairman And Chief Executive Officer, Chubb
Dr. Robert Hartwig, Professor Of Insurance And Finance And Director Of The Risk And Uncertainty Management Center, University of South Carolina
Mr. Robert Gordon, Senior Vice President For Policy, Research And International, American Property Casualty Insurance Association
Mr. Martin South, President, United States & Canada Division, Marsh
Download a PDF of the testimony from the BCC.
Watch a replay the hearing.