26-03-2020
IRDAI eases rules as brokers voice fears of lapses in insurance coverage
Insurance AlertssIRDAI eases rules as brokers voice fears of lapses in insurance coverage
Large corporations risk lapsing insurance policies for their plant and machinery as well as employees, as both insurers and businesses are forced to shut shop because of coronavirus-related lockdowns in several parts of the country.
In a development, the IRDAI yesterday announced several measures aimed at ensuring continued proper service to policyholders and customers. All insurers have been asked to maintain continuity of business operations through alternative modes including telephonic and digital contacts.
All insurers have also been asked to display on their websites, information on the functioning of their offices and alternative arrangements made for premium payments, renewal, settlement of claims and lodging of other service requests.
In addition, the IRDAI has permitted the following relaxations:
1. In case of life insurance policies, there is a grace period for payment of renewal premiums. Insurers have been asked to enhance the grace period by an additional 30 days if desired by the policyholders.
2, In case of health insurance policies, the insurers may condone delay in renewal up to 30 days without deeming such condonation as a break in policy. However, insurers are requested to contact the policyholders well in advance so as not to have a discontinuance in coverage.
3. In case of board meetings of insurers, the meetings due till 30 June 2020 may be held through video conferencing or other audiovisual means.
4. In case of submission of monthly returns for the month of March 2020 by insurers and insurance intermediaries, an additional time of 15 days will be allowed. Similarly, for quarterly returns, an additional period of up to one month will be permitted.
The IRDAI appeals to all the insurers, insurance intermediaries and distribution channels to be sensitive to the needs of the policyholders in these trying times, while policyholders are urged to cooperate.
Prior to the IRDAI's statement, the Insurance Brokers Association of India had written to the regulator to consider permitting extension of existing policies for a minimum of 60 days with policyholders paying a pro-rata premium at existing terms and rates. The association asked the regulator to relax regulations that prevent insurers from providing cover before premiums are received. For this extended cover to be seamless, insurance companies need to receive the premium before the existing policy expires.
Source: Asia Insurance Review
