IRDAI GUIDELINES FOR OF INSURERS DUE TO COVID 19

IRDAI GUIDELINES FOR OF INSURERS DUE TO COVID 19 • IRDAI has released guidelines for prudent management of financial resources of insurers in the context of Covid-19 pandemic. • This includes critically examining their capital availability and solvency margin as required, and devise strategies to ensure that they have adequate capital

• Overview:

The Insurance Regulatory and Development Authority of India (IRDAI) vide Circular No: IRDA/ F&A/ CIR/ MISC/ 089/ 04/ 2020 dated 13.04.2020 has issued guidelines to All the Insurers for prudent management of financial resources of insurers in the context of Covid-19 pandemic. The pandemic has cast its shadow across various economic activities with massive dislocation in global production, supply chains and trade. The Organization for Economic Cooperation and Development (OECD) estimates suggest that annual global gross domestic product (GDP) growth could be lower by up to 2 percentage points for each month in which strict containment measures continue. If the shutdown continues for three months with no offsetting factors, annual GDP growth could be between 4- 6 percentage points lower than it otherwise might have been. The emerging scenario is likely to leave an impact on both liquidity, sufficiency and availability of capital. [caption id="attachment_88050" align="aligncenter" width="710"] IRDAI GUIDELINES FOR OF INSURERS DUE TO COVID 19[/caption]

The IRDAI Authority advises all insurers to take following steps:

i. Board of insurers are advised to critically examine their capital availability and solvency margin as required in the current financial year 2020-21 and devise strategies to ensure that they have adequate capital and resources available with them; ii. To align the dividend pay-out for the FY 2019-20 so as to be in conformity with the strategy at (i) above; and iii. Rationalize the expenses of management for the FY 2020-21 so as to be in line with the strategy at (i) above.

Other Advisories:

(Source: The Hindu Bussiness Line) • insurers to maintain business continuity with all possible alternate modes including telephonic contact and digital mode. • In case of renewal of life insurance policies, the insurers may offer an additional grace period of 30 days (there is a grace period of 30 days being provided) if desired by the customers. • In health insurance policies, the insures could offer 30 days grace period without deeming it as a break in the policy. • The monthly mandatory submissions could be delayed by 15 days while quarterly returns can also get an additional window of 30 days Source Disclaimer: IN NO EVENT THE AUTHOR SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM OR ARISING OUT OF OR IN CONNECTION WITH THE USE OF THIS INFORMATION. THIS HAS BEN SHARED FOR KNOWLEDGE PURPOSES ONLY.