Page 10 - Insurance Times November 2020

ing, necessitate the review of existing IRDAI sets up panel to ex- risks posed by cyberattacks. The work-
advertisements regulations. ing group has been asked to submit its
amine need for standard
Some of the key changes proposed to report within two months.
the current regulations include modi- cyber liability insurance
fying definition of advertisements and product Irdai issues draft for stan-
rationalisation of certain other defini- Irdai has set up a panel to explore pos- dard vector-borne disease
tions, enlarging scope of the term 'mis- sibility of a basic standard product
leading advertisement', and putting structure to provide insurance cover cover like dengue, malaria
onus for enforcing compliance on ad- for individuals and establishments to IRDAI has released an exposure draft
vertisement endorsed by third parties manage their cyber risks. The general for a standard vector-borne disease
on insurers for compliance. liability policies do not cover cyber health policy which will have a mini-
IRDAI (Insurance Advertisements and risks, and cyber insurance policies cur- mum sum assured of Rs 10,000 and a
Disclosure) Regulations, 2000 were rently available are highly customised maximum of Rs 2 lakh.
notified in 2000. Two minor amend- for clients in a new and quickly grow- Insurers will soon be allowed to offer
ments were effected in 2010 and 2015, ing market. specific insurance cover to the public
respectively. "Hence, it is felt that a basic standard for the treatment of vector-borne dis-
As per the draft, all insurance adver- product structure is required to pro- eases like dengue, malaria, and
tisements should ensure that "com- vide insurance cover for individuals and chikungunya.
establishments to manage their cyber
munications are clear, fair and not Policyholders would be able to choose
misleading whatever be the mode of risks," said IRDAI while announcing to protect themselves against any of
setting up a working group to exam-
communication. They should use ma- the diseases or a combination of such
terial and design (including paper size, ine the need for standard cyber liabil- vector-borne diseases. And, insurers
color, font type and font size, tone and ity insurance product. shall set the price for every covered
volume) to present the information The panel, headed by P Umesh, Con- disease separately and have been ad-
legibly and in an accessible manner", sultant-Liability Insurance, has been vised by the regulator to offer dis-
among other things for clarity. asked to study various statutory provi- counts as per the underwriting policy
sions on information and cybersecurity, for opting for various disease combina-

Insurers should be allowed and to evaluate critical issues involving tions.
legal aspects of transactions in cyber
to enter surety bond busi- space. It will also examine various As per the proposal, the product shall
be offered for a fixed term of one year
ness: IRDAI working group types of incidents involving with a waiting period of 15 days.
cybersecurity in the recent past and
Irdai working group on surety bonds, possible insurance coverage strategies The insurance policy will cover the
has said insurers should be allowed to for those, and the cyber liability insur- treatment of dengue fever, malaria,
enter into surety bond insurance busi- ance covers available in Indian market filaria (Lymphatic Filariasis), kala-azar,
ness with solvency margin above a cer- and in other developed jurisdictions. chikungunya, Japanese Encephalitis,
tain threshold. This is because the ex- The nine-member panel has been asked and Zika Virus, it said, adding the
perience of surety bond insurance is stakeholders can send their comments
to recommend the scope of the cyber
yet to develop in Indian market and the on the exposure draft to IRDAI by No-
liability insurance covers for the present
risk exposure under this business is context and for the medium term, and vember 27.
quite significant compared to other explore possibility of developing stan- According to a last-year report by the
lines of business which are reasonably dard coverages, exclusions and optional World Health Organization (WHO),
mature in Indian insurance market. "If extensions for various categories. IRDAI these diseases account for more than
the insurer's solvency ratio falls below noted that amid the COVID-19 pan- 17 per cent of all infectious diseases.
the specified threshold limit at any demic, there are rising incidences of Vector-borne diseases cause more than
point in time, the insurer shall stop cyberattacks and a growing number of 7 lakh deaths annually, the report
writing new surety bond business until high-profile data breaches. states. Additionally, in over 128 coun-
its solvency ratio improves above the The regulator felt that cybersecurity is tries more than 3.9 billion people are
specified threshold limit," the working the most important need for all sec- at risk of contracting dengue, with an
group said in its recommendations. tors today to address the numerous estimation of 96 million cases per year.

10 The Insurance Times, November 2020