Three insurance industry trade bodies in the US have rejected the Pandemic Risk Insurance Act (PRIA) in favour of their own proposal that the government carry all of the primary risk of an outbreak, and seek reinsurance privately to divest some of it.

Representative groups the National Association of Mutual Insurance Companies (NAMIC), the American Property Casualty Insurance Association (APCIA), and Independent Insurance Agents and Brokers of America, all signed off on the plan.

The proposal advises that the government use the infrastructure set up by the FEMA programme to administer payouts, and was released to counter a bill expected to be put forward to congress by NY representative Carolyn Maloney, advocates a risk-sharing agreement between the government and insurers, with the state acting as a backstop.

NAMIC president and CEO Charles Chamness said: “Pandemics simply are not insurable risks; they are too widespread, too severe, and too unpredictable for the insurance industry to underwrite.

“As we’ve seen in the past few months, pandemics are a national problem, and we need a national solution.”