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House committee approves cannabis safe harbor bill for insurers, banks

Marijuana laws

Insurance trade groups are praising a legislative effort to ensure that safe harbor is provided for banking and insurance industry participants in cannabis transactions.

H.R. 1595, the Secure And Fair Enforcement Banking Act of 2019, introduced March 7 by Rep. Ed Perlmutter, D-Colo., which would ensure access to financial services for cannabis-related legitimate businesses and service providers, was adopted on a 45-15 vote by the House Financial Services Committee on Thursday. An amendment offered by Rep. Steve Stivers, R-Ohio, included insurers in these safe harbor provisions and was adopted by a voice vote on Thursday.

The bill and the Stivers amendment are “a good first step to ensuring the needed clarity for insurers that wish to provide financial services in states that have legalized marijuana,” Wesley McClelland, vice president of federal government relations at the American Property Casualty Insurance Association in Washington, said Tuesday in a statement. “While the bill does not address all the potential transactions that our industry is compelled by states to provide to individuals and businesses, we hope to continue working with the bill sponsors and supporters to address the larger set of issues that insurers face as more states look to legalize marijuana.”

APCIA, along with the American Land Title Association, the Council of Insurance Agents & Brokers, the Independent Insurance Agents & Brokers of America, the Reinsurance Association of America and the Wholesale & Specialty Insurance Association, sent a letter of support for the bill to Reps. Perlmutter and Stivers on Tuesday.

Rep. Stivers’ amendment “is an important recognition of the dilemma faced by our industry because of the differing legal treatment of cannabis under federal and state law and regulation at the state level,” the groups stated. “This amendment will prevent criminal prosecution of insurers engaged in the business of insurance with (cannabis-related legitimate businesses). It also will prevent civil liability for agents, brokers and insurers, their officers, directors or employees for the same. It is an important step toward legal certainty for our industry.”

“We look forward to continuing to work with you and Congress to ensure our industry is not caught between additional conflicting obligations under federal and state law,” the letter continued. “Insurers must meet state statutory or regulatory requirements to protect all their customers and consumers and pay all relevant state-law based claims and not merely those of CRLBs. To do this, we will continue to seek legislative language to provide safe harbor protections for state legal cannabis-related insurance products and services that our industry provides to individuals or entities that are not CRLBs.”

“This bill addresses an urgent public safety concern for legitimate businesses that currently have no recourse, but to operate with just cash,” House Financial Services Committee Chair Maxine Waters, D-Calif., said during a mark-up session on Tuesday. “However, I also view this bill as part of a holistic approach toward providing criminal justice reform to those who have been harmed by criminalization of marijuana and should not by any means be the only bill that the House takes up on the important issue of cannabis reform.”

But Rep. Sean Duffy, R-Wis., questioned the legislation after noting that the committee was considering a bill to end homelessness in the United States during the same mark-up session.

“Homelessness and addiction are closely tied together,” he said. “Why do we want to support legalizing marijuana that puts us on a pathway to other drugs when we know there’s a direct tie in with drug use and homelessness?”

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