April 01, 2020

Commercial Insurance Brokerage Headline of the Day:

Excerpt from    The CIAB    Daily COVID-19 Update

Excerpt from The CIAB Daily COVID-19 Update

We’ve written much in this newsletter over the past 10 days about how we’ve been working with other industry players and policyholder groups to build consensus around the creation of a federal facility to help save American businesses broadly that are threatened with extinction by the current ravages of the pandemic. This morning, you received a “Yellow Alert” with this letter from 35 major organizations – business/policyholders and insurance, but mostly policyholders – and this summary of our proposed “COVID-19 Business and Employee Continuation and Recovery Fund.”
 
The policyholders who signed on to this letter cut through a broad swath of American business and all are respected organizations on Capitol Hill. We continue to have good ongoing discussions with other major stakeholders. Our goal is the enactment of this legislation as a part of a necessary Phase 4 of economic triage.
 
The next phase of our efforts will be to identify a bipartisan lineup of champions for this legislation on Capitol Hill. We are already sensing great interest from many of the legislators with whom we have built strong relationships over the years. As we consult with our allies on identifying congressional authors, we encourage you to share these documents with your clients. Already, we know of a couple of firms that are circulating the letter to clients in industry sectors that are not currently represented among the cosigners, and encourage them to get their trade associations to support this approach, which is modeled after the 9-11 Victims Compensation Fund.
 
So, what are its chances? It is far too difficult to assess at this point, and there will need to be a groundswell from the business community. Perhaps in the end this isn’t the approach, but right now it’s the best one that we see. Challenges – we’ve got a few:

  • Majority Leader McConnell says we need to first assess any effectiveness of the $2.2 trillion CARES Act. Speaker Pelosi says we need to move to Phase 4 right away. Currently, both chambers are recessed until April 20. We want action as soon as possible.
  • As much as we agree with the Speaker on that, we (and Sen. McConnell) are not liking the kinds of policy prescriptions she’s advancing in Phase 4 – forgiveness of student loans, rolling back the limitations on State and Local Tax (SALT) deduction from the tax reform bill, a massive infrastructure stimulus (President Trump today likewise called for $2 trillion in infrastructure spending in the next stimulus.). The priorities MUST be to save existing American businesses through a broad federal facility that can contract with private industry (as in, our own) on a voluntary basis to deliver this relief.
  • As we noted last night, the $350 billion SBA loan/grant program may run out of money in a flash, as soon as lenders get the guidance they need from the Administration to be issuing checks. That argues for a political opportunity. What argues against it is the fact that it is very dangerous for Congress to even convene given the growing number of Members of Congress who have acquired the virus.

Finally, we want to praise the Reinsurance Association of America’s Frank Nutter for conceptualizing this proposal, and we heap praise on Jennifer Platt, the tireless lobbyist for the International Council of Shopping Centers, for running point with the policyholder community.

Source: The Council of Insurance Agents & Brokers