Page 8 - Insurance Times April 2020
P. 8

of premium collection of Rs 4 lakh crore  the  terms  and  conditions  of  fire  the insurance despite the lockdown.
         by  FY25.  Presently  the  premium  insurance policies, the cover ceases to  “The policyholders are complaining that
         collection is standing at Rs 2 lakh crore.  exist if the premises are unoccupied for  the  absence  of  any  competition  is
         In FY19, non-life penetration stood at  a period of 30 days.          leading  to  a  multifold  increase  in
         0.97%. GI Council has also launched an  Due  to  the  lockdown,  factories/  insurance premiums (with all insurers
         awareness and education campaign -  warehouses    and    commercial   quoting the same price in a de-tariffed
          Faayde Ki Baat.                   establishments have been unoccupied  market),  application  of  COVID-19
         Though the penetration (non-life) in this  since March  24. While  the  general  exclusions  unilaterally,  and  now,
         period has increased from about 0.5%  insurers have said COVID-19 will be  coverage continuity being put under
         of  GDP  (in  2000)  to  1%  of  GDP  treated as a special situation and cover  doubt,” it said in the letter.
         (presently), this is far below the Asian  will not be explicitly denied, a lot of  General Insurers have advised various
         penetration  of  1.85%  and  global  restrictions have been attached.  policyholders based on the guidance
         penetration of 2.8% to GDP.        Insurance Companies consent also need  received from GIC Re that continuity of
         AV Girija Kumar, Chairman, GI Council,  to be taken in advance for policy size of  cover  is  subject  to  compliance  of
         said , “The idea is to help deepen the  over Rs 5 crore where a decision will be  specified conditions during lockdown
         reach of personal lines of business of  taken by the insurance company on a  period and prior written approval of
         non-life insurers and focus on smaller  case-to-case basis whether the cover  insurer needs to be taken for continuity
         towns.”                            will be extended or not.           of cover.
         Business        Owners        in   This means that in case of a fire or theft  The  fire  insurance  rates  for  291
                                            in large commercial premises (with
                                                                               occupancies have been revised from
         dilemma over coverage of           insurance above Rs 5 crore) during a  January 1 onwards. Despite this, claim
         business  interruption             lockdown, claims will not be paid unless  payments could be a bone of contention.
                                            prior consent has been sought.
         losses under COVID-19              On  April  27,  Insurance  Brokers  IBAI  has  asked  the  IRDAI  to  issue
                                                                               necessary directions. However, sources
         The  COVID-19  has  brought  new   Association of India wrote a letter to  said insurers and reinsurers would be
         challenges for business owners in terms  the IRDAI Chairman seeking reprieve  given the right to take a decision on this
         of continuity of Insurance Cover. As per  from  the  COVID-19  exclusions  and  matter.
                                            sought that continuity be provided in

               General Insurance Council Advisory for Continuity of Insurance Policies

                                  (Renewal of SFSP Policies during Covid 19 pandemic)

          We would like to bring to the attention of policyholders that the Standard Fire and Special Perils Policy(commonly known as
          property policy)has the following condition:
          "Under any of the following circumstances the insurance ceases to attach as regards the property affected unless the Insured,
          before the occurrence of any loss or damage, obtains the sanction of the Company signified by endorsement upon the  policy
          by or on behalf of the Company :-
          b) If the building insured or containing the insured property becomes unoccupied and so remains for a period of more than 30
          days (Not applicable for Dwellings).”

          We are all going through an unprecedented situation of lockdown to battle the deadly Corona Virus.

          We do understand that in the current crisis it might not have been possible for some policyholders to send communication to
          insurance companies for continuation of coverage and obtain endorsements.

          Therefore it has been decided that a one-time relaxation is given to all policyholders whose property is unoccupied on or after
          25/03/2020 till 03/05/2020. Properties of such policyholders shall be deemed to be covered subject to the policy being in force.
          All other terms and conditions of the policy remain unaltered.

          Policyholders are requested to contact their respective Insurance Company in case of any doubt / difficulty.
                                                                                         - General Insurance Council


           8  The Insurance  Times, April 2020
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