Page 8 - The Insurance Times October 2021

IRDAI News

IRDAI extends timeline for the Insurance Information Bureau (IIB). The guidelines once approved and
The regulator will empower the IIB to implemented promise to address the
sale of short-term Covid collect data from the industry and come high funding requirement for construc-
products out with benchmark pricing. According tion and infra companies.
IRDAI has permitted general and health to insurance sources, the IIB will be simi- Surety insurance contracts may be of-
insurance companies to offer and short- lar to credit information bureaus like fered to construction companies in In-
term Covid-specific products, including Cibil and help companies identify and dia that cover road projects, housing/
reprice loss-making businesses.
Corona Kavach and Corona Rakshak till commercial buildings and other infra-
March 31, 2022. In the draft regulations for the IIB, the structure projects of the government
Earlier, in March this year, the regula- regulator has said that the bureau will and the private sector, IRDAI said while
tor decided to extend the timeline for be a repository of data for all entities unveiling the draft IRDAI (Surety Insur-
the sale and renewal of such policies till regulated by the IRDAI. IIB will use this ance Contracts) Guidelines, 2021. "The
September, looking at the prevailing data for analytics and the generation contract bonds may include bid bonds,
situation. Insurance companies were of reports for the industry. It will also performance bonds, advance payment
provide benchmark rates for life, mo- bonds and retention money. Apart from
initially allowed to offer these policies
till March 31, 2021. tor, health, fire and marine insurance. contract bonds, the insurers may un-
These benchmark rates will be aimed derwrite customs or tax bonds and
Covid-specific policies saw a huge up- at promoting "reasonableness of rates court bonds," it said.
take in the market due to the raging and sustainability of business in all lines
virus and was one of the main reasons of insurance". Surety insurance contracts cannot be
why the health insurance segment saw issued where the underlying assets or
a huge uptick. Many insurers had The bureau will ensure that informa- commitments are outside India.
tion about losses on account of fraud is
launched their own Covid-specific prod-
ucts following which the regulator came shared among all players to help the IRDAI issues revised guide-
industry reduce the same.
up with two standard Covid-specific lines for trade credit insur-
products--Corona Kavach and Corona
Rakshak. Surety insurance cover ance
limit set at 30% of project IRDAI issued revised guidelines for trade
IRDAI seeks to cut un- credit insurance that will come into ef-
value: IRDAI fect on 1 November 2021. The aim is to
healthy business with data IRDAI has said the limit of guarantee promote the sustainable and healthy
bureau recast under surety insurance contracts should development of the trade credit insur-
IRDA, in an effort to ensure that the not exceed 30 per cent of the project ance business and improve economic
value. Also, the contracts should be is- stability by labelling trade losses be-
non-life and life industry underwrites
healthy business, has decided to recast sued only to specific projects and not cause of credit risks.
clubbed for multiple ones.
8 The Insurance Times, October 2021