IBAI has also sought waiving of Section 64VB of Insurance Act that says an insurance policy is not valid unless the policyholder pays premium within the prescribed date.
With the Coronavirus (COVID-19) outbreak leading to a lockdown in states like Maharashtra, an industry body in the insurance sector has sought some relaxations in the current insurance laws.
Insurance Brokers Association of India (IBAI) has sought an extension of the existing policies for 60 days by payment of pro-rata premium at existing terms and conditions from the Insurance Regulatory and Development Authority of India (IRDAI).
In a letter to the insurance regulator, IBAI has sought that IRDAI temporarily waives off 64VB clause for policyholders so that they can continue the coverage and pay premiums at a later date.
As per Section 64VB of the Insurance Act, an insurance policy is not valid unless the policyholder makes the premium payment prior to the due date.
Considering that there is a partial shutdown across states, it is likely that premium payments could be delayed. While online payment mode is still available, a large proportion of policyholders still prefer paying at the insurance company/bank branches through payment of cash or cheque.
In its letter, IBAI said that specialist insurance market Lloyd's of London has already allowed an extension of insurance policies due to COVID-19 threat. It also said that global insurance markets have provided relaxation to policyholders through an auto-extension clause.
During outbreaks like COVID-19 outbreak, both individuals and businesses at a higher risk from incidents like business interruption, death, ailment and loss of key persons. Not having insurance protection would have a higher financial impact on the country at this time.A total of 283 positive COVID-19 cases have been reported in India. Maharashtra is the worst hit with 64 reported positive cases.
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