RAA backs legislation allow insurers to underwrite cannabis operations
The Reinsurance Association of America (RAA), the US trade association for property/casualty reinsurers, has welcomed new legislation designed to allow re/insurers to provide products to businesses and individuals producing or selling state-legalized cannabis.
Bipartisan legislation introduced in both the Senate and House, drafted with the help of the RAA, would ensure that businesses and individuals in states that have legalized cannabis can access insurance coverage and the protections it provides.
The Clarifying Law Around Insurance of Marijuana (CLAIM) Act, sponsored by Senators Bob Menendez (D-NJ), Rand Paul (R-KY), and Jeff Merkley (D-OR), and Reps. Nydia Velázquez (D-NY) and Steve Stivers (ROH) would provide a comprehensive federal safe harbor for the insurance industry so that it can provide products and services to businesses and individuals that have a direct or indirect relationship with state-legalized cannabis.
It would ensure that insurers would not face the threat of federal criminal prosecution or civil liability and would be able to comply with a variety of state statutory and regulatory requirements.
The SAFE Banking Act, sponsored by Reps. Ed Perlmutter (D-CO), Steve Stivers, Nydia Velázquez, and Warren Davidson (R-OH), includes CLAIM Act provisions that also would achieve these objectives.
Frank Nutter, president of the Reinsurance Association of America, said: "The RAA was instrumental in coordinating nine insurance trades, working with a bipartisan group of Members of Congress, and ensuring comprehensive federal safe harbor provisions for our industry were included in the CLAIM Act and SAFE Banking Act.
“It is essential that state-legalized cannabis-related businesses and individuals have basic protections that insurance provides so that they can safeguard their property, employees, and customers.”
He added: “We thank Senators Menendez, Paul, and Merkley and Reps. Velázquez, Stivers, Perlmutter, and Davidson for their leadership, and we look forward to working with them to achieve enactment of this important legislation.”
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