By Claire Wilkinson

A government pandemic backstop could benefit the captive insurance sector, though much will depend on the structure of any plan, experts say.

The concept of a Pandemic Risk Insurance Act that Marsh LLC CEO John Doyle supports would be helpful to the insurance industry and captives, said Michael Serricchio, a managing director with Marsh Captive Solutions, a unit of Marsh LLC in Norwalk, Connecticut.

“A backstop and mechanism similar to the Terrorism Risk Insurance Act could provide a lot of safety and security for captives that would then write this coverage and be a lot more protected,” Mr. Serricchio said.

However, plan details such as the policies, premiums, triggers, and limits would have to be “thought out,” he said.

A draft PRIA bill circulating in Congress does include captive insurers, sources say. Other proposals being considered include a taxpayer-funded pandemic backstop backed by three major insurance trade groups.

Pandemic risks are uninsurable if “we’re simply talking about relying on the premium and capital of the commercial insurance and reinsurance market,” said Martin Eveleigh, chairman, Atlas Insurance Management, based in Charlotte, North Carolina.

“If there is a government backstop program put together, then perhaps the risk becomes at least up to a point insurable and transferable. If such a program is put together, captives need access to it as much as commercial carriers,” Mr. Eveleigh said.

The concept of a PRIA-type program is worth exploring, said Anne Marie Towle, Indianapolis-based senior vice president at Hylant Group Inc.

The question is “how do we fund for this, how do we make it accessible through a captive,” she said.