Reps. Nydia Velázquez (D-NY) and Warren Davidson (R-OH) filed the Clarifying Law Around Insurance of Marijuana (CLAIM) Act on Wednesday. The bill, designated H.R. 10471, would create a safe harbor protecting insurers, brokers and agents from federal penalties for working with state-licensed marijuana businesses.
This is the fourth consecutive Congress in which the cannabis business insurance measure has been introduced. The text of the current bill remains largely the same as prior versions.
Earlier this year, Sens. Kevin Cramer (R-ND) and Ruben Gallego (D-AZ) filed similar legislation in the Senate.
Related bipartisan legislation was also filed earlier this year in the House and Senate to provide safeguards for banks that work with the cannabis industry.
The bill would prohibit federal agencies from penalizing insurance providers for covering cannabis businesses, and would bar insurers from terminating or limiting policies for marijuana companies or ancillary businesses due to the nature of their enterprise.
“Because of the conflict between federal and state law, insurers are still hesitant to write policies for cannabis businesses,” Velázquez said in a press release. “That means thousands of legal small businesses are operating without a safety net.”
“One fire or one storm could wipe out everything an owner has built, with no way to recover,” Velázquez said in the press release. “The CLAIM Act fixes this by giving these entrepreneurs access to the same basic insurance protections every other legal business takes for granted.”
“Businesses operating legally under state law should be free to purchase insurance, and insurers should be free to serve them,” Davidson said.
“The federal government should not use regulation to interfere with lawful commerce or override decisions made by the states,” Davidson said. “The CLAIM Act removes that federal interference and protects the freedom of insurers and their customers to do business.”
As it stands, cannabis firms are limited in their ability to gain property, casualty and title insurance coverage.
The legislation includes a requirement that the Government Accountability Office study and report on “barriers to marketplace entry, including in the licensing process, and the access to financial services for potential and existing minority-owned and women-owned cannabis-related legitimate businesses.”
It also provides protections for employees of insurers, affirming they could not be held liable just because they work with a cannabis company.
Supporters have argued that insurance access would mitigate safety risks and prevent companies from being denied bank financing, which can occur when businesses lack coverage.
The bill now awaits action in the House.
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