Sec. 4. Pandemic Risk Reinsurance Program
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There is established in the Department of the Treasury the Pandemic Risk Reinsurance Program. Notwithstanding any other provision of State or Federal law, the Secretary shall administer the Program, and shall pay the Federal share of compensation for insured losses in accordance with subsection (e). Each entity that meets the definition of an insurer under this Act may participate in the Program. The Secretary shall provide a process by which insurers may elect to participate in the Program, with respect to a calendar year.
This Act may not be construed to affect any policy for business interruption insurance in force on the date of the enactment of this Act. No payment may be made by the Secretary under this section with respect to an insured loss that is covered by a participating insurer, unless— the person that suffers the insured loss, or a person acting on behalf of that person, files a claim with the participating insurer; the participating insurer provides clear and conspicuous disclosure to the policyholder of the premium charged for insured losses covered by the Program and the Federal share of compensation for insured losses under the Program— in the case of any policy that is issued before the date of enactment of this Act, not later than 90 days after that date of enactment; in the case of any policy that is issued within 90 days of the date of enactment of this Act, at the time of offer and renewal of the policy; and in the case of any policy that is issued more than 90 days after the date of enactment of this Act, on a separate line item in the policy, at the time of offer and renewal of the policy; in the case of any policy that is issued after the date of enactment of this Act, the participating insurer provides clear and conspicuous disclosure to the policyholder of the existence of the $750,000,000,000 cap under subsection (e)(2), at the time of offer, purchase, and renewal of the policy; the participating insurer processes the claim for the insured loss in accordance with appropriate business practices, and any reasonable procedures that the Secretary may prescribe; and the participating insurer submits to the Secretary, in accordance with such reasonable procedures as the Secretary may establish— a claim for payment of the Federal share of compensation for insured losses under the Program; written certification— of the underlying claim; and of all payments made for insured losses; and certification of its compliance with the provisions of this subsection.
During each calendar year, each participating insurer shall, with respect to such year— make available, in all of its business interruption insurance policies, coverage for insured losses; and make available business interruption insurance coverage for insured losses that does not differ materially from the terms, conditions, amounts, limits, deductibles, or self-insured retentions and other coverage grants, limitations, and exclusions applicable to losses arising from events other than public health emergencies.
The Secretary shall issue regulations, as soon as practicable after the date of enactment of this Act, that apply the provisions of this Act to State residual market insurance entities and State workers' compensation funds. For purposes of the regulations issued pursuant to paragraph (1)— a State residual market insurance entity that does not share its profits and losses with private sector insurers shall be treated as a separate insurer; and a State residual market insurance entity that shares its profits and losses with private sector insurers shall not be treated as a separate insurer, and shall report to each private sector insurance participant its share of the insured losses of the entity, which shall be included in each private sector participating insurer's insured losses.
Any participating insurer that participates in sharing profits and losses of a State residual market insurance entity shall include in its calculations of premiums any premiums distributed to the participating insurer by the State residual market insurance entity. The Federal share of compensation under the Program to be paid by the Secretary for insured losses of an participating insurer during each calendar year shall be equal to 95 percent of that portion of the amount of such insured losses that exceeds the applicable insurer deductible required to be paid during such calendar year.
In the case of a covered public health emergency commencing after the date on which the Secretary issues final regulations pursuant to paragraph (2)(B)(ii), no compensation shall be paid by the Secretary under subsection
(a)unless the aggregate industry insured losses for participating insurers resulting from such covered public health emergency exceed $250,000,000. The Federal share of compensation for insured losses under the Program shall be reduced by the amount of compensation provided by the Federal Government to any person under any other Federal program for those insured losses. Notwithstanding paragraph
(1)or any other provision of Federal or State law, if the aggregate insured losses exceed $750,000,000,000, during a calendar year— the Secretary shall not make any payment under this Act for any portion of the amount of such losses that exceeds $750,000,000,000; and no participating insurer that has met its insurer deductible shall be liable for the payment of any amounts under subparagraph (B). For purposes of subparagraph (A), the Secretary shall determine the pro rata share of insured losses to be paid by each participating insurer that incurs insured losses under the Program, except that, notwithstanding paragraph
(1)or any other provision of Federal or State law, no participating insurer may be required to make any payment for insured losses in excess of its deductible under section 3(8) combined with its share of insured losses under paragraph (1)(A) of this subsection. Not later than 90 days after the date of enactment of this Act, the Secretary shall issue final regulations for determining the pro rata share of insured losses under the Program when insured losses exceed $750,000,000,000, in accordance with clause (i). Not later than 120 days after the date of enactment of this Act, the Secretary shall provide a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives describing the process to be used by the Secretary for determining the allocation of pro rata payments for insured losses under the Program when such losses exceed $750,000,000,000. The Secretary shall notify the Congress if estimated or actual aggregate insured losses exceed $750,000,000,000 during any calendar year. The Secretary shall provide an initial notice to Congress not later than 15 days after the end of a covered public health emergency, stating whether the Secretary estimates that aggregate insured losses will exceed $750,000,000,000. The Secretary shall have sole discretion to determine the time at which claims relating to any insured loss or covered public health emergency shall become final. Any determination of the Secretary under this subsection shall be final, unless expressly provided, and shall not be subject to judicial review. The Secretary may, in consultation with the NAIC or the appropriate State regulatory authority, apply the provisions of this Act, as appropriate, to other classes or types of captive insurers and other self-insurance arrangements by municipalities and other entities (such as workers' compensation self-insurance programs and State workers' compensation reinsurance pools), but only if such application is determined before the commencement of a covered public health emergency in which such an entity incurs an insured loss and all of the provisions of this Act are applied comparably to such entities. This Act may not be construed to limit or prevent insurers from obtaining reinsurance coverage for insurer deductibles or insured losses retained by insurers pursuant to this section, nor shall the obtaining of such coverage affect the calculation of such deductibles. The amount of financial assistance provided pursuant to this section shall not be reduced by reinsurance paid or payable to an insurer from other sources, except that recoveries from such other sources, taken together with financial assistance for the calendar year provided pursuant to this section, may not exceed the aggregate amount of the insurer's insured losses for the calendar year. If such recoveries and financial assistance for the calendar year exceed such aggregate amount of insured losses for the calendar year and there is no agreement between the insurer and any reinsurer to the contrary, an amount in excess of such aggregate insured losses shall be returned to the Secretary.