Amidst the coronavirus (COVID-19) pandemic, the insurance regulator has asked companies to provide an option to defer date of journey in travel insurance products.
This will be for policies that were/are valid between March 22 and April 30.
Due to COVID-19 and the ensuing lockdown in India and across the globe, several travellers have been either stranded in another location domestically or abroad.
Travel restrictions will be applicable till April 14 for the time being. There was a fear among individuals with travel insurance products about the validity of the product due to cancellation of flights.
Policy holders can call up their insurers to check if this facility has been provided.
The total number of reported COVID-19 cases in India stands at 1,251. The Union Health Ministry has said that 102 patients have recovered so far, but 32 have died.
This decision by Insurance Regulatory and Development and Authority of India (IRDAI) was among a slew of other measures announced to help tide over the COVID-19 situation.
In the first week of March, IRDAI had asked insurance companies to expeditiously settle all COVID-19 claims and also handle quarantine-related claims on the basis of the terms and conditions of the health insurance policy.
Later, on March 23, IRDAI had also asked life insurers to give an additional grace period of 30 days for payment of renewal premiums.
Insurers were also asked to design products specifically for covering COVID-19 that would cover the costs of the treatment. Typically, if an individual is admitted to a state-run hospital the government bears the treatment costs. However, in the case of private hospitals and home quarantine-related charges, the costs are to be borne by the affected persons.
As far as policyholders are concerned, IRDAI said that insurers have to display on their website a dedicated help line number for policyholders and another help line number for other stakeholders including agents and intermediaries.
Though the normal response time for policyholder complaint redressal is 15 days, due to the prevailing lockdown situation, an additional 21 days will be allowed. This is for all complaints which are received on or after March 15, 2020 and up to April 30, 2020. However, this additional response time is not applicable to complaints pertaining to COVID-19 for which the extant timelines will continue to apply.
IRDAI has said that while insurance has been exempted from the lockdown, companies should advise their offices to function with only absolutely necessary staff including those involved in claims settlement, authorisation for hospitalisation, renewal of insurance policies and such other activities.
“To the extent possible, work from home may be adopted by facilitating the same for the staff of insurers, intermediaries and agents,” said IRDAI.
Further, the regulator said companies have 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.
Insurers also have to set up a crisis management committee to evaluate all risks including strategic, operational, insurance, liquidity, credit, reputational, market, foreign exchange, reduction in new business, reduction in renewal business, asset liability mismatch, reduction in yield, capital erosion, and claims in the wake of present situation, and shall devise necessary mitigation measures.
Any severe impact on the operations or capital requirements or solvency margin (which is fixed at 150 percent) has to be promptly communicated to IRDAI. It is likely that some relaxations would be provided by the regulator on a case-to-case basis.
Since remote working will have to be facilitated, IRDAI said that it is possible that there could be an increase in the number of cyber-attacks on personal computer networks. Therefore, insurers need to take precautionary measures to address such cyber risks and mitigate them as soon as they are identified.
For new policy sales, IRDAI said that wherever email addresses of policyholders are available, policy documents will have to be issued through email.