By Anoop Khanna
Insurance Regulatory and Development Authority of India (IRDAI) has issued detailed instructions for Indian insurers to meet the challenges emerging from the developing COVID-19 pandemic.
In a press release issued on 30 March 2020, IRDAI member (life) K Ganesh said, “Insurance, being a critical requirement of the population, has been exempted from the lockdown. However, insurance companies and other regulated entities are advised to operate their offices with absolutely necessary staff so as to maintain essential insurance services including claims settlement, authorisation for hospitalisation, renewal of insurance policies and such other activities.
“In all the operating offices, extreme care needs to be taken by all concerned to maintain prescribed hygiene, social distancing etc.”
The IRDAI press release also contains an exhaustive list of safety measures that include several steps to streamline communications with major stakeholders of the companies.
Communication strategy
IRDAI said, “Insurers shall prominently display on their website a dedicated helpline number for policyholders and another help line number for other stakeholders including agents and intermediaries. Adequate arrangements may be made to service all the policyholders and other stakeholders satisfactorily through these help lines.”
The regulator has also instructed insurance companies to display frequently asked questions for COVID-19 claims prominently on their websites.
Business continuity plans
Insurers have also been asked to put in place a business continuity plan (BCP) which inter-alia deals with processes, transactions, reporting and customer services to be handled in a seamless manner to take care of the present situation. A copy of the same will have to be submitted to IRDAI.
Insurers will have to set up a crisis management committee to monitor the current situation on real time basis and to take appropriate timely decisions on the following issues:
a. Issues pertaining to safety of staff, policyholders, intermediaries and agents
b. Assessing new challenges that may emerge on a day-to-day basis and measures to mitigate them and
c. Adopting necessary measures to minimise business disruption.
The crisis management committee will also be required to provide regular inputs to the risk management committee of the insurer.
The risk management committee will evaluate all major risks and shall devise necessary mitigation measures. Any severe impact on the operations or capital requirements or solvency margin shall be promptly communicated to the authority.
Cyber risks and data security
IRDAI has also focused on cyber risk and data security. It said, “Due to enhanced remote working, it is possible that there could be an increase in the number of cyber attacks on personal computer networks.”
IRDAI has asked the insurers to take precautionary measures to address such cyber risks and to mitigate such risks as soon as they are identified.
It has asked the insurers to educate their staff of possible cyber risks and the associated safeguards to be taken by the staff while working from home.
Products
IRDAI has also asked insurers to devise appropriate insurance products that would provide protection from risks arising out of COVID-19. The press release said, “The authority is committed to process such product approval applications on a fast track mode.”
Policy servicing and claims
Insurers have been asked to make special efforts to enable the policyholders to pay premium using digital methods by educating them through SMS, emails etc.
IRDAI has said, claims arising on account of COVID-19 should be processed expeditiously. Insurers are encouraged to adopt simplified/expedited claim procedures for such cases. In addition, other claims should also be processed within the prescribed period by making special efforts.
Grievance redressal
The normal response time for policyholder complaint redressal is 15 days, due to the prevailing lockdown situation, an additional 21 days is allowed in respect of all complaints which are received on or after 15 March 2020 and up to 30 April 2020. However, this additional response time is not applicable to complaints pertaining COVID-19 for which the extant timelines will continue to apply.
Travel insurance
In cases where insurers have issued travel insurance policies which were/are valid between 22 March 2020 and 30 April 2020, an option may be provided to the policyholders to defer the date of travel without any additional charge.
Relaxations
IRDAI has again asked the insurers to take note of the circulars already issued by the authority with respect to insurance covers for COVID-19.
Boards to be kept in the loop
The insurers should keep their respective boards informed of the actions taken by them in dealing with situations arising out of COVID-19.
Mr Ganesh said, “The authority is constantly evaluating emerging impact of COVID-19 on the insurance sector and will issue suitable instructions from time to time as considered necessary.
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