Page 86 - Life Insurance Today July - December 2020

viate from the stipulation by the au- Irdai working group on surety bonds, sultant-Liability Insurance, has been
thority through regulatory provisions has said insurers should be allowed to asked to study various statutory pro-
will also be treated as misleading enter into surety bond insurance busi- visions on information and
advertisements. ness with solvency margin above a cer- cybersecurity, and to evaluate critical
tain threshold. This is because the ex- issues involving legal aspects of
While issuing the exposure draft, IRDAI perience of surety bond insurance is transactions in cyber space. It will also
said evolutionary trends in advertise- yet to develop in Indian market and examine various types of incidents
ments in the last 20 years, coupled the risk exposure under this business involving cybersecurity in the recent
with technological developments is quite significant compared to other past and possible insurance coverage
which have changed the medium of lines of business which are reasonably strategies for those, and the cyber
advertising, necessitate the review of mature in Indian insurance market. "If liability insurance covers available in
existing advertisements regulations. the insurer's solvency ratio falls below Indian market and in other developed
the specified threshold limit at any jurisdictions.
Some of the key changes proposed to point in time, the insurer shall stop
the current regulations include modi- writing new surety bond business until The nine-member panel has been asked
fying definition of advertisements and its solvency ratio improves above the to recommend the scope of the cyber
rationalisation of certain other defini- specified threshold limit," the working liability insurance covers for the present
tions, enlarging scope of the term group said in its recommendations. context and for the medium term, and
'misleading advertisement', and explore possibility of developing stan-
putting onus for enforcing compliance IRDAI sets up panel to ex- dard coverages, exclusions and optional
on advertisement endorsed by third amine need for standard extensions for various categories. IRDAI
parties on insurers for compliance. noted that amid the COVID-19 pan-
cyber liability insurance demic, there are rising incidences of
IRDAI (Insurance Advertisements and product cyberattacks and a growing number of
Disclosure) Regulations, 2000 were high-profile data breaches.
notified in 2000. Two minor amend- Irdai has set up a panel to explore pos-
sibility of a basic standard product
ments were effected in 2010 and The regulator felt that cybersecurity is
2015, respectively. structure to provide insurance cover the most important need for all sec-
for individuals and establishments to
tors today to address the numerous
manage their cyber risks. The general
As per the draft, all insurance adver- risks posed by cyberattacks. The work-
tisements should ensure that "com- liability policies do not cover cyber ing group has been asked to submit its
munications are clear, fair and not risks, and cyber insurance policies cur- report within two months.
rently available are highly customised
misleading whatever be the mode of
for clients in a new and quickly grow-
communication. They should use ma- IRDAI issues draft for stan-
terial and design (including paper size, ing market.
color, font type and font size, tone and dard vector-borne disease
"Hence, it is felt that a basic standard
volume) to present the information cover like dengue, malaria
product structure is required to pro-
legibly and in an accessible manner",
vide insurance cover for individuals and IRDAI has released an exposure draft
among other things for clarity.
establishments to manage their cyber for a standard vector-borne disease
risks," said IRDAI while announcing health policy which will have a mini-
Insurers should be al- setting up a working group to exam- mum sum assured of Rs 10,000 and a
lowed to enter surety ine the need for standard cyber liabil- maximum of Rs 2 lakh.
ity insurance product.
bond business: IRDAI
Insurers will soon be allowed to offer
working group The panel, headed by P Umesh, Con- specific insurance cover to the public

"The role of affection in marriage is "give and pull" which simply puts you in a position of a teacher who learns
good."

86 July - December 2020 Life Insurance Today