IIF Authors

Status: Will be live at 04/17/2020 14:52

IIF Letter To IAIS On Avoiding Measures That Would Abrogate Existing Insurance Contracts

IIF members are committed to supporting policyholder, customers and the broader society, during and after the crisis, and we welcome the opportunity to explore with you and IAIS members the most appropriate channels for delivering that support.

There are developments in certain jurisdictions that could seriously compromise the ability of insurers to continue their critical role in providing essential products and services to individuals and businesses and to continue their long-standing role as major investors in the real economy. Legislative proposals would require the payment of business interruption or other insurance claims notwithstanding the fact that the contracts in question often do not cover pandemics such as COVID-19, and some contracts contain specific pandemic exclusions.

That is, these legislative proposals effectively provide for retroactive contractual changes resulting in coverage of liabilities that were not contemplated (or even purposefully excluded) at the time those policies were issued and, therefore, were neither underwritten, nor priced into existing contracts, nor reflected in reserves.

To protect the health of insurance markets worldwide, we urge the IAIS to issue a public statement opposing these legislative proposals and pointing out the negative consequences to both insurers and their policyholders of adopting measures that would abrogate existing insurance contracts.