Page 51 - The Insurance Times October 2021

Exposure Draft on IRDAI (Surety Insurance 3. However, it is advised that general insurers may be
guided by the model policy wordings for Personal Cyber
Contracts) Guidelines, 2021
Insurance cover and common reference framework
IRDAI/NL/WG/SB/299/2021-22 provided on cyber insurance policies and coverages
Date:08-09-2021 given in the document attached to this circular.
4. The main objectives of the guidance document on
1. Insurance Regulatory and Development Authority of product structure for Cyber Insurance are;
India had set up a Working Group to study the feasibility a) to enable insurers to evaluate new technologies
of General Insurers to underwrite Surety Insurance. The posing heightened cyber risk, identify protection
Authority, upon examining the recommendations of the gaps in the existing products and address the
Working Group report, stakeholders’ comments and changing needs of market.
considering the specific nature of Surety insurance as a
b) to facilitate insurers in developing stand-alone
product, has proposed separate guidelines to regulate
cyber insurance products, specifically designed to
the Surety Insurance business. Accordingly, the draft
address the evolving cyber risks.
guidelines are prepared and placed in the annexure.
c) to provide a set of recommendations on maximum
2. The objectives of the proposed guidelines are to promote
and regulate sustainable and healthy development of possible coverages that could be included in the
cyber insurance products.
Surety Insurance Business in India.
d) to encourage insurers to adopt best practices and
3. Stakeholders are requested to give their comments /
provide additional covers in response to customer
suggestions through e-mail to nl-products@irdai.gov.in
with a copy to Mr A. Rama Sudheer, Manager needs.
(ramasudheer@irdai.gov.in) before 28th September, e) to improve the development of the cyber insurance
2021 in the following format. market with new products and enhance benefits for
policyholders.
(Yegnapriya Bharath) 5. General insurers who have already developed some
Chief General Manager (Non-Life) cyber insurance products with exclusive coverage for
individuals to protect against cyber perils and currently
Product Structure for Cyber Insurance offering the products that mainly focused on commercial
business, may review the product structure based on the
IRDAI/NL/CIR/MISC/242/09/2021
coverages advocated in the document. The filing of the
Date:08-09-2021 such product/s may be undertaken at the earliest to

1. There are rising incidences of cyber attacks along with a respond to the needs of customers who are increasingly
exposed to the cyber threat of digital services.
growing number of high profile data breaches. The online
exposures for individuals, business organizations, offices 6. The general insurers can also expand the scope of cyber
and other establishments continue to increase more so risks included in the traditional policies for the benefits
in the current pandemic situation. The Authority had, of policyholders. However, the insurers may be mindful
therefore, constituted a working group with a focus to of overlapping coverages in cyber insurance policies and
examine the possibility of bringing standardisation of other types of insurance policies currently covering
Cyber Liability Insurance policy wording. cyber risk with limited scope.
2. The Working Group, after conducting wide consultations 7. Considering the demand for new cyber insurance
with various stakeholders, and after internal products due to the dynamic nature of cyber-attacks
deliberations concluded that standardisation of policy and novel challenges, the general insurers shall
wording is not desirable at this juncture keeping in view continuously endeavour to design tailor-made products
of the evolving nature of legislative frameworks in referring to model policy wordings and guidance
dealing with cyber risk, fast growing digital ecosystem, provided in the document. The above objectives should
increasing interconnectedness globally and complexity be implemented by insurers in a manner that is fair and
of IT systems and emergence of new risks. useful to policyholders.

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