Page 4 - Communique - Raghnall Insurance Broking 21.9.20

21.09.2020 / MONDAY Volume 1 I Issue No 3

COVID UPDATE PAGE 4

IMPACT ON HEALTH SECTOR:
COVID UPDATE FOR The costs of hospitalisation including the treatment during the
INSURANCE INDUSTRY: quarantine period have to be settled by insurers as per the terms
and conditions of the policy. The Coronavirus is spreading fast in
Coronavirus (COVID-19) emerging from China has now India. For those holding a health insurance policy, the pertinent
gradually taken over the entire globe, affecting millions of question that comes to mind is, whether their claims will be
people across the world. The pandemic has not only affected settled or not and will their policy cover Coronavirus? Dispelling
the survival of humans but has also threatened the survival of all sorts of confusions, any person who is hospitalised as a result
the world's biggest economies. The virus has forced countries of Coronavirus and takes treatment will be covered as any other
all around the world to impose lockdowns, shutting down illness. The subsequent claims will be processed as per regular
business and industry for a prolonged period of time. norms, provided the individual has been hospitalised for 24
Companies both big and small, shops and even individuals, have hours. The government has issued advisories on Corona virus
incurred a major hit to their fiscal status due to business infection and insurance companies will be guided by that.
interruption losses. The losses caused due to the interruption Incidentally, the IRDAI has recently issued a set of guidelines to
are very likely to result in companies filing insurance claims to be followed by the insurance companies in settlement of all
reclaim their “Loss of profit”. Furthermore, the pandemic has claims arising under Corona virus. In the health insurance
not only affected more than 25 Lakhs citizens of our country and policies that cover hospitalization expenses, in order to alleviate
has also taken lives of more than 50, 000 Indians which gives a the hardships that may be caused to the policyholders, IRDAI has
peek into the upcoming stated that all claims reported under corona virus shall be
h e a l t h a n d l i f e handled as per the following norms:
insurance claims, will i) Where hospitalization is covered in a product, insurers shall
increase in premium ensure that the cases related to Coronavirus disease (COVID-19)
rates and legal suits need to be expeditiously handled.
that the insurance ii) The costs of admissible medical expenses during the course of
industry might have to treatment including the treatment during the quarantine period
face. The pandemic has have to be settled in accordance with the applicable terms and
pushed businesses conditions of the policy contract.
across sectors to iii) All the claims reported under COVID 19 shall be thoroughly
change the way they operate and the insurance industry is no reviewed by the claims review committee before repudiating
exception. From selling new policies to settling claims, the the claims.
extended lockdown in the wake of covid-19 has pushed The regulator has also asked insurers to design products
insurance companies to depend heavily on their digital covering the costs of treatment for Corona Virus similar to
architecture. products introduced by them for various specific diseases
A report by professional services firm PwC, titled Covid-19: including vector-borne diseases. If Coronavirus is declared as a
Impact on the Indian Insurance Industry, says that the two pandemic by WHO or Indian government, then claims may or
productive months for the insurance industry—March for life might not be payable as such claims are excluded under many
insurance and April for non-life corporate renewals—have been health insurance policies. As of now, Coronavirus is fully covered
hit by around 30% and 15%, respectively. It further emphasizes in the newly introduced 'Corona Kavach' Policies by PSUs and a
the changes insurers will have to bring about in terms of their good lot of other Health Insurance Products being introduced by
product categories. According to the report, private health the Private Players as most of them even not even considered as
insurance schemes cover only 18% of the population in urban a pre-existing ailments. Therefore, there is no waiting period
areas and a little over 14% in rural areas. Since the risk of covid- specific to such ailments are mandated in those products
19 is not currently priced under active products, these claims covering Covid 19.
may cause an additional burden on the books of insurers if
treated outside government hospitals. In General Insurance a Our
large proportion of Insurance Industry is simply dependent on Corporate Office:
industries and businesses such as automobile, travel, hotels
and infrastructure. So challenges in General Insurance Sector 301B, Raheja Chambers, Free Press Journal
arising out of lockdown could create additional requirements to Marg,Nariman Point, Mumbai - 400021
be resolved by them with IRDAI, for the interest of our nation.
IRDA License No : 536
Expire Date: 23/08/2021
Phone :022-40031169 / 022-40167681 Fax :022-61571959 Email :support@raghnall.co.in Direct Broker (Life & General Insurance)