Pelican State News

Two public policy advocacy groups have joined forces to oppose a bill proposed by the District of Columbia City Council — and similar to legislation recently introduced in Louisiana — that would force insurers to pay for economic losses whether their business interruption policies cover pandemics or not.

The Tea Party Nation and the Hispanic Leadership Fund are asking the U.S. Senate Committee on the District of Columbia to overrule the Coronavirus Omnibus Emergency Amendment Act of 2020, which states, “coverage for loss of use and occupancy and business interruption, shall be construed to provide coverage for business interruption directly or indirectly resulting from a public health emergency.”

In addition to Louisiana, similar legislation has been introduced in New Jersey, Pennsylvania, New York, Ohio, Massachusetts, and South Carolina, according to media reports.

"It’s the type of legislation that sounds nice but will create a lot more problems down the road for small businesses and insurers in terms of solvency,” said Mario H. Lopez, president of the Hispanic Leadership Fund. “Insurers could raise the rates of business interruption coverage for future business owners.”

The proposed bill further states that an insurer, upon paying a claim based on the pandemic, "may apply to the Commissioner of the District of Columbia Department of Insurance, Securities, and Banking for relief and reimbursement from funds collected and made available for this purpose."

However, Judson Phillips, president of Tea Party Nation, said that the City Council's proposal will not cover the payouts.

“They are offering this incentive that the city will reimburse for the payoffs but nothing comes in under budget or on time. There will be a lot of claims," Phillips told Pelican State News.

D.C. City Council Chair Phil Mendelson did not immediately respond to requests for comment.

Senators who are members of the Committee that oversees the City Council include John Kennedy (R-LA), Ron Johnson (R-WI), and James Lankford (R-OK).

“If this passes and is not overruled, there will be a lot of claims made by business owners and insurance companies will take a big hit,” Phillips said in an interview. “Insurers could even withdraw insurance coverage in D.C. entirely.”

Some 5,016 have tested positive for the coronavirus in the District, 666 have recovered and 251 have died, according to the D.C. government’s website.

The Consumer Action for a Strong Economy tweeted on Twitter that the pending proposed bill is a dangerous, anti-consumer bill that will harm the people it claims to help.

“By forcing insurers to give COVID-19 payouts to select businesses that don’t have pandemic coverage, it will sadly devastate the local economy by picking winners while creating far too many losers,” posted CASE President Matthew Kandrach. “The net result will be average consumers suffering from increased costs and diminished services. Here’s hoping that Councilman Kenyan McDuffie does the right thing and votes against it while guiding his colleagues in the right direction as well.”

Center for Freedom & Prosperity tweeted that, if passed, the bill will retroactively change binding contractual agreements between private parties to fit bureaucrats’ political agendas. 

“Changing insurance policies to mandate pandemic coverage might make politicians feel good, but it will decimate the economy in the process – raising premiums, increasing costs, and draining the pool for future small businesses in need,” wrote Andrew F. Quinlan, president of the Center for Freedom & Prosperity. “If the Council passes this harmful, anti-consumer, anti-free market legislation, it is incumbent upon Sens. John Kennedy, Ron Johnson, and James Lankford – whose committees and subcommittees have jurisdiction over the District – to take a stand for the free-market and American consumers by stepping in.” 

The Council’s next legislative meeting is on Tuesday May 5, according to the Council’s website.

“This deck-rigging is as harmful as they come and will increase costs on small businesses and consumers while jeopardizing the solvency of the system.  If this crony bill passes, what's to stop the D.C. Council from rewriting ANY contract in this crisis - whether it's lease agreements between landlords and tenants, or labor agreements between employers and contractors, or anyone of the nearly-unlimited types of business contracts out there today?” tweeted Andrew Langer, president of the Institute for Liberty. “Through his chair on the Senate Appropriations subcommittee, Senator John Kennedy has jurisdiction over D.C., as do Sens. John Lankord and Ron Johnson through their respective leadership positions on the HSAG Committee and RAGM Subcommittee. Should the legislation advance, they need to do everything they can to take the legs out from under it before it’s too late.” ­