b'Insurance Regulatory | US/NAIC Insurance After the COVID-19 Pandemic:A Federal Solution to Business Interruption InsuranceThe COVID-19 pandemic decimated the US economy in 2020. Well-intentioned stay-at-home orders designed to reduce the spread of COVID-19 caused some segments of commerce to almost instantly grind to a halt. Moreover, the on-again, off-again nature of public health directives (again, trying to reduce the spread of COVID-19) caused the economic recovery of these segments of commerce to be slow, and is yet ongoing at the time of this writing. Many businesses, especially small businesses, looked to their business interruption (BI) insurance policies for financial relief. While many BI policies specifically exclude coverage for losses due to viruses, some are silent and the efforts of the plaintiffs bar have led to significant coverage disputes. As these policies are litigated across the country, the attention of lawmakers, regulators and the insurance industry has turned to how the insurance industry and the government could respond to future pandemics and global health emergencies.The Coverage GapBI risks caused by pandemics are not insurablethis type of insurance coverage cannot be provided by the private market. Insurance coverage functions according to the theory that many people will pay a comparatively low premium, so that those who incur damages will receive a sum of money upon the occurrence of specific events or risks insured against. In order for this theory to work, the risks must be statistically assessable and sufficiently independent from each other. This is where BI risks caused by pandemics become problematic for private insurers. During a pandemic, BIs occur almost simultaneously everywhere in the world. Moreover, the losses are certainly astronomicaleven potentially exceeding the assets of the entire insurance industry. Due to this, most insurers in the private insurance market are unable or unwilling to insure BI risks caused by pandemics. In March of 2020, when the COVID-19 pandemic forced most of the US into lockdown, the NAIC held a special session on COVID-19. Stakeholders noted in that sessions that the BI insurance issue is going to require a federal solution.The Pandemic Risk Insurance Act of 2020 On May 26, 2020, Representative Carolyn Maloney and 20 co-sponsors, introduced the Pandemic Risk Insurance Act of 2020 (PRIA) in the US House of Representatives. PRIA is intended to support a BI/event cancellation insurance market that will serve the needs of insureds while managing the insurance industrys risk exposure. PRIA allows for the federal government and the insurance industry to share the risk of loss from future pandemics or global health emergencies. In efforts similar to the Terrorism Risk Insurance Act (TRIA) that was passed almost two decades ago in the wake of 9/11, PRIA is designed to be the federal 70GLOBAL INSURANCE INDUSTRY | YEAR IN REVIEW2020'