R.J. Lehmann on the Pandemic Risk Insurance Act

Money – ICLE Editor-in-Chief R.J. Lehmann was quoted by Money magazine about some of the problems inherent in the Pandemic Risk Insurance Act proposed by Rep. Carolyn Maloney (D-N.Y.).

The legislation has attracted support from companies including McLennan and Marsh Insurance. But there’s also concern about the fairness and effectiveness of Maloney’s approach. Speaking to the insurance subcommittee of Congress, R.J. Lehmann, senior fellow with International Center for Law and Economics, raised misgivings, despite describing himself as ‘someone who has long preached the gospel of risk-based insurance.’

In this case, he said, a ‘risk-based program could result in big tech firms that can work remotely,’ and so suffer less harm, ‘paying the least and restaurants, community theaters, and churches paying the most. I don’t think that’s the outcome you want.’ Lehmann also points out that many small businesses do not currently carry business-interruption insurance, and so is concerned that the PRIA program would be less universal than is needed to avoid economic harm.