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US insurers face political pressure to pay out for pandemic-related claims

March 27, 2020 / Lyle Adriano
SHARESHARESHARE

Insurance companies are being pressured by the federal government to pay for the massive influx of business interruption insurance claims filed in the wake of the COVID-19 pandemic – something the industry is worried could lead to not just insolvencies, but the destabilization of the entire economic landscape. Last week, 18 legislators of the House told insurance trade groups that their members should recognize financial losses triggered by the outbreak as part of their policyholders’ business interruption coverage. The bipartisan letter was signed by 12 Democrats and six Republicans. In response, state insurance regulators this week issued a warning that forcing insurers to pay for the numerous business interruption claims could bankrupt the sector, Politico reported. Even the insurers themselves are concerned about how paying for all business interruption claims could impact the industry.