The CLAIM Act would shield insurers serving state-legal marijuana businesses from certain federal penalties. Michigan and Ohio operators would still have to find insurers willing to cover them.
LANSING — Nine insurance industry groups have endorsed a bipartisan bill that could make it easier for insurers to serve cannabis businesses in Michigan, Ohio and other states where marijuana sales are legal.
The Clarifying Law Around Insurance of Marijuana Act, or CLAIM Act, would prohibit federal agencies from penalizing or discouraging insurers solely because they provide coverage connected to a state-legal cannabis business. Ohio Republican Rep. Warren Davidson and New York Democratic Rep. Nydia Velázquez introduced the House bill Sept. 16. It was referred to the House Financial Services Committee.
The insurance groups endorsed the measure in a letter to its House and Senate sponsors, arguing that the difference between federal and state treatment of marijuana creates legal uncertainty for companies that insure the industry. The signers include associations representing property and casualty insurers, life insurers, agents, brokers, title insurers and reinsurers.
For Michigan and Ohio cannabis companies, the bill addresses a basic business need. A licensed dispensary, grower or processor may seek insurance for its property, equipment or other risks while operating in a market authorized by state law. The CLAIM Act’s sponsors say federal uncertainty has limited insurers’ willingness to serve such businesses.
The measure would not itself provide coverage or reduce premiums. Its text expressly says insurers would not be required to do business with a cannabis company. Whether more insurers would enter the Michigan and Ohio markets, and what they would charge, remains unknown.
What the bill would do
Under the House bill, a federal agency could not prohibit, penalize or otherwise discourage an insurer from providing insurance connected to a state-legal cannabis business. It would also protect insurers and their officers, directors and employees from liability under federal law solely for engaging in that insurance business where the underlying cannabis activity is permitted by applicable state or tribal law.
The legislation reaches beyond dispensaries. Its definition of a cannabis-related business includes companies that cultivate, produce, manufacture, transport, distribute or sell cannabis products under state law. Other provisions address people and companies that lease real estate or equipment to cannabis businesses.
The bill would leave state insurance regulation in place. Insurers would still make their own coverage decisions and comply with applicable state rules. It would also direct the Government Accountability Office to study barriers facing minority-owned and women-owned cannabis businesses, including access to financial services.
Why insurers are backing it
In their endorsement letter, the trade groups said insurers face potential liability because cannabis can be legal under state law while remaining subject to federal restrictions. They argued that resolving that uncertainty would help the industry serve cannabis businesses and other customers with direct or indirect ties to them.
Their support is a significant development for the proposal, but it is not a commitment by member companies to issue policies. Operators would still need to find coverage that fits their risks and budgets.
The proposal has been introduced in four consecutive Congresses. A Senate companion was filed earlier this year, according to Marijuana Moment. The newly introduced House version has not become law, and the protections it proposes are not in effect.
Davidson’s role gives Ohio a direct voice in the legislation. For cannabis businesses on both sides of the Michigan–Ohio border, the next question is practical: Would removing a federal obstacle bring them more insurance choices? That answer will depend on insurers’ decisions if Congress passes the bill.
