Retrospective Cover Could Bankrupt Insurers, Regulators Say
Law360, London (May 7, 2020, 5:52 PM BST) -- An international body for insurance regulators warned members on Thursday that forcing insurers to cover coronavirus-linked business interruption claims when no specific pandemic cover was originally in place could trigger financial instability.
The International Association of Insurance Supervisors said plans like those being considered in the U.S. could bankrupt the insurance industry.
The warning comes after eight U.S. states proposed that all standard policies for business interruption should be retrospectively amended to provide cover for small companies forced to close as a result of the pandemic.
"Requiring insurers to cover such claims could create material solvency risks and significantly undermine the...
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