“Both Congress and the insurance industry are starting to realise that if the government had taken half the money dumped into these other wasteful programmes and used it as a backstop or bailout for the insurance industry to retroactively provide pandemic coverage through TRIA, one in six Americans never had to lose their jobs.
“Retroactive coverage becomes less viable with each stimulus bill; however, the main reason it will still work is the right money is still not getting into the right hands in the right way.”
This is the view of Butler University Insurance and risk management professor Zachary Finn, who was featured in several industry news outlets in the US in March calling for the federal government to look at his plan to retroactively apply business interruption coverage for Covid-19 through amending the Terrorism Risk Insurance Act (TRIA).
Despite the Trump administration’s commitment to stimulus spending, which has seen the president sign off on close to $2.7tn – an initial $2.2tn and further $483bn announced on 24 April – he still argues that retroactive coverage would be the best way forward for the economy.
Using his own employer as an example, he claims Butler has $2.6m in potential funds under the CARES Act and between $6m and $40m in losses.
“Retroactive insurance through an amendment to TRIA does not have to provide 100% coverage,” he adds.
“They could say ‘okay Butler, you have 50% of your normal BI limit for this Covid-19 shutdown, and net that against the CARES Act funds you received’.”
He explains his criticism of the stimulus measures and gave further details of how his plan would work in a conversation with NS Insurance.