Republican Senator Files Federal Bill to Protect Insurers Serving State-Legal Marijuana Businesses
- A Republican senator, Kevin Cramer (R-ND), introduced Senate Bill 5049 to protect insurance companies that cover state-legal marijuana businesses.
- The bill proposes a federal safe harbor shielding insurers from federal penalties when providing policies to cannabis businesses operating legally under state, local, or tribal laws.
- This proposal is a new version of the CLAIM Act, aiming to ensure state-legal marijuana businesses can access affordable insurance by protecting insurers from federal criminal, civil, and administrative penalties.
- Despite marijuana being legal in many states, federal prohibition causes insurers to hesitate in offering coverage like property, casualty, and workers’ compensation to cannabis businesses.
A Republican senator has introduced legislation designed to protect insurance companies that provide coverage to state-legal marijuana businesses.
Senate Bill 5049 was filed Tuesday by Senator Kevin Cramer (R-ND). The measure would create a federal safe harbor for insurers engaging in business with a “cannabis-related legitimate business.”
The bill was read twice and referred to the Senate Committee on Banking, Housing and Urban Affairs. It currently has one cosponsor, although the full text and a Congressional Research Service summary were not immediately available following its introduction.
What is known about the proposal is that it would shield insurance companies from federal penalties solely for providing policies or other insurance services to marijuana businesses operating legally under state, local or tribal law.
The proposal appears to be the latest version of the Clarifying Law Around Insurance of Marijuana (CLAIM) Act. Cramer previously cosponsored the legislation alongside Senators Rand Paul and Jeff Merkley, with then-Senator Bob Menendez serving as its lead sponsor. Previous versions sought to ensure state-legal marijuana businesses could obtain comprehensive and affordable insurance by protecting insurers and their employees from federal criminal, civil and administrative penalties, including penalties tied to income received from those policies.
Although dozens of states allow medical or recreational marijuana, cannabis businesses continue to face complications because marijuana remains prohibited under federal law. Insurers may consequently be reluctant to offer property, casualty, workers’ compensation and other forms of coverage to businesses involved in the state-regulated industry.