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India: COVID-19: Insurance Regulatory Updates

Claims Settlement

  • Claims under COVID-19 are required to be handled expeditiously and reviewed by the claims review committee of the Insurer before repudiation. Indemnity based health insurance products providing coverage for the hospitalization treatment costs (including the standalone “Arogya Sanjeevani Policy” health insurance product) are expressly required to cover the costs of hospitalization treatment incurred on account of COVID -19.
  • With respect to unit linked policies maturing by 31 May 2020, where fund value is to be paid in lumpsum, Life Insurers have been permitted to offer settlement options in accordance with the erstwhile R25 of the IRDA (Linked Insurance Products) Regulations 2013, regardless of whether such option exists under the specific product. In terms of such settlement options, Life Insurers are also required to exercise all due diligence and clearly explain the possible risk of continued fluctuation of fund value based on daily NAV, and obtain the clear consent of the policyholder.

Information Requirements

  • Insurers are required to display certain information on their websites, including, inter alia,information regarding the functioning of the Insurer’s offices, alternate arrangements made for premium payments, policy renewals, settlement of claims and lodging of other service requests and FAQs for COVID-19 claims. Life Insurers are required to provide information on admissibility or other relevant information with respect to COVID-19 death claims/health insurance claims, for all insurance products on their website.
  • Insurers are required to have a dedicated helpline for policyholders and another helpline for other stakeholders. The details of the helpline number along with the contact number of the officer for escalation is to be displayed on the Insurers’ websites.

Other Measures

  • Insurers have been advised to design appropriate insurance products covering costs and providing protection from risks arising out of COVID-19. The IRDAI has clarified that such products will be approved under a fast track process.
  • The IRDAI has instructed Insurers to make special efforts to enable digital methods of premium payment and educate policyholders through SMS, emails, etc. In addition, Insurers have been directed to issue policy documents through email within the prescribed period, and where such email addresses are not available, Insurers may also use SMS. In this regard, Insurers have been encouraged to capture the email and phone number of all prospective customers for further policy servicing.
  • With respect to travel insurance policies valid between 22 March 2020 and 30 April 2020, policyholders are required to be provided with an option to defer the date of travel, without any additional charge.
  • The premium rates for motor third party liability insurance, as notified for FY 2019-20, have been extended to the FY 2020-21 until further notice.

Concluding Remarks

Given the unprecedented nature of the present crisis, the IRDAI as the sectoral regulator has proactively issued various instructions to ensure continuity of Insurers’ operations and provided relaxations with respect to filings, disclosures and/or timeline related compliances under the insurance regulatory framework. The IRDAI has also taken measures for safeguarding the interests of policyholders, such as a fast-track product approval for insurance products specifically designed for the present pandemic, and development of a speedier settlement process for COVID-19 claims.

It is interesting to note that that multiple insurance brokers are reported to have approached the IRDAI requesting for a similar relaxation of premium deadlines for general insurance policies also, in light of the ongoing pandemic situation. At present, the IRDAI has not issued any express guidance with respect to general insurance policies for extension of renewal dates due in April 2020. Tuli & Company