A bipartisan pair of U.S. House lawmakers has reintroduced legislation designed to give insurance companies federal protections when serving state-legal marijuana businesses, joining a companion measure already pending in the Senate.
Representatives Nydia Velázquez (D-N.Y.) and Warren Davidson (R-Ohio) reintroduced the Clarifying Law Around Insurance of Marijuana Act, or CLAIM Act, on September 16.
The House proposal follows the introduction of Senate Bill 5049, an identical-named CLAIM Act filed July 21 by Senators Kevin Cramer (R-N.D.) and Ruben Gallego (D-Ariz.). The Senate measure was referred to the Senate Committee on Banking, Housing and Urban Affairs, where it remains pending.
The legislation would establish a federal safe harbor for insurers that provide coverage to marijuana businesses operating legally under state, local or tribal law.
Under the proposal, federal agencies could not prohibit, penalize or discourage an insurer from providing coverage to a state-legal marijuana business solely because of its connection to marijuana. The protections would also extend to insurance agents and brokers and are intended to reduce the risk of federal criminal prosecution or civil liability stemming from services provided to the marijuana industry.
“Because of the conflict between federal and state law, insurers are still hesitant to write policies for cannabis businesses,” Velázquez said in announcing the House bill. “That means thousands of legal small businesses are operating without a safety net.”
Davidson said businesses operating legally under state law should be able to purchase insurance without federal interference.
“Businesses operating legally under state law should be free to purchase insurance, and insurers should be free to serve them,” Davidson said.
The legislation would also direct the Government Accountability Office to study barriers facing women and minority entrepreneurs seeking to enter the marijuana industry and identify potential ways to expand access.
The House bill is backed by a coalition of insurance organizations, including the American Property Casualty Insurance Association, National Association of Mutual Insurance Companies, Independent Insurance Agents & Brokers of America, Council of Insurance Agents & Brokers, Reinsurance Association of America and several other industry groups.
The Senate version, S. 5049, was formally introduced July 21 and read twice before being referred to the Banking Committee. Like the House proposal, it would create a safe harbor for insurers doing business with qualifying marijuana companies.
Similar CLAIM Act legislation has been introduced in previous sessions of Congress but has not been enacted.
