The coronavirus (COVID-19) outbreak is leading to widespread concern and is increasing economic hardship for all consumers, businesses and communities.

Since the private sector has now been allowed to treat COVID – 19 patients, insurers have been getting health insurance claims. Though some elective treatment have been postponed but ultimately it will get done and only then the real impact on the insurance sector will be known.

COVID-19 is affecting the insurance industry in multiple ways; from employee insurance and continuity of business issues to client service obligations and finally to sustain the financial outlook of the company.

From claim scrutiny to claim admission to force majeure clause to regular compliances, every area has not become a grey area in the insurance sector.

We have tried to answer certain questions being raised by the industry to bring more clarity in the minds of the people:

Health Insurance

Q 1.Does my insurance policy cover COVID – 19?

Ans: Most insurance service providers have now started covering the medical expenses and treatment for COVID – 19 in their policies. In light thereof, Insurance Regulatory and Development Authority of India (IRDA) has issued guidelines IRDAI/HLT/REG/CIR/054/03/2020 dated 04.03.2020 and vide Circular no. IRDAI/INSP/CIR/MISC/077/03/2020 dated 30.03.2020 for meeting health insurance requirements of various sections and has advised the insurance companies to design products covering the costs of treatment for COVID – 19.

However, these are a general set of guidelines and might or might not be applicable to all insurance policies.

2.Does there exist any specific guidelines/circulars with respect to Health Insurance Contracts?

Ans: With regards to Health Insurance Contracts, IRDA vide Circular bearing No. IRDA/Life/Cir/MISC/072/03/2020 dated 23.03.2020 had dispensed with the directions to the insurance companies to provide for specific information, product wise pertaining to the admissibility or otherwise of COVID – 19 claims to be provided on the website.

3. Are there any notifications for cases where a person fails to renew health insurance policy or discontinue the same due to lockdown?

Ans: The IRDA vide its Press Release dated 23.03.2020 has directed the insurance companies to condone the delay up to 30 days in renewal of health insurance policies without deeming such condonation as a disruption in policy. However, IRDA also laid down the guidelines for the insurance companies to contact the insurance policy holders, well-in-advance so as not to have discontinuance in coverage.

Whereas, the Ministry of Finance vide Notification No. 14017/18/2020-IN-II issued on 01.04.2020 has notified that if a health insurance policy is expiring and due for renewal in the period beginning from 25.03.2020 to 14.04.2020, one may make payment of its renewal premium on or before 21.04.2020 to ensure continuity of the Health Insurance cover from the date on which the policy falls due for renewal.

Due to issuance of two different releases by two different Authorities, this has created confusion in the minds of the people with regard to additional time allotted for renewal of health insurance policy.

Life Insurance

4. Are there any reliefs given for the payment of Premium pertaining to Life Insurance Policy?

Ans: The IRDA vide Circular bearing No. IRDA/Life/Cir/MISC/072/03/2020 dated 23.03.2020 has issued directions to the insurance companies for extending the Grace Period, by one month, for payments due in the month of March 2020, in the areas where lockdown has been declared by the State Government.

 5. Are there any directions for expeditious settlement of claims arising out of COVID – 19?

Ans: The Circular bearing No. IRDA/Life/Cir/MISC/072/03/2020 dated 23.03.2020 issued by IRDA directed insurers to settle Life Insurance claims of COVID – 19 to be settled expeditiously to suit the emergency situation in the affected areas.

Further, vide Circular bearing No. IRDAI/INSP/Cir/MISC/077/03/2020 issued on 30.03.2020 by IRDA directed the insurance companies to process the claims arising on account of COVID – 19 promptly and efficiently.

6. Is it mandatory for the Insurance companies, who have issued Life Insurance policies, to display information on their website with regard to admissibility of claims?

Ans: IRDA vide Circular bearing No. IRDA/Life/Cir/MISC/072/03/2020 dated 23.03.2020 has issued directions to the insurance companies for providing information on the website about admissibility, or otherwise COVID – 19 death claims, for all the products covering the contracts already issued to the policyholders.

Motor Insurance.

7. Is there any relief for Third Party Motor Insurance holders, in case if one fails to renew its policy due to nation-wide lockdown?

Ans: The Ministry of Finance vide Notification No. 14017/18/2020-IN-II issued on 01.04.2020 has notified that in case if one is not able to renew its Third Party Motor Insurance policy expiring between 25.03.2020 to 14.04.2020, then he/she can make payment of its renewal premium on or before 21.04.2020 to ensure continuity of statutory Motor Vehicle Third Party Insurance cover from the date on which the policy falls due for renewal.

Impact & Communication

All the major insurance companies have now extended the grace period for paying renewal premiums in March. Life Insurance Corporation (LIC) has also extended the deadline up to April 15, 2020.

In cases where offices are not functioning fully or partially, the policyholders are mandatorily be notified by SMSes, e-mails,and press release in addition to display boards and pamphlets in the brand offices.

Relaxations to Companies

8. What are the relaxations given to Companies?

Ans: On 28.03.2020, IRDAI further issued Relaxation of timeline for certain provisions of the IRDAI (Re-Insurance) Regulations, 2018 as under:

1. File Re-Insurance Programme by 30th April, 2020 approved by the Board;

2. The insurers may comply with the timelines on or before 31st May, 2020; and

3. The relaxations are for the Financial Year 2020-21 only.

Therefore, the relaxations and instructions have helped in settling the repercussions of delayed payment of premiums.

Also, digital payments and other online facilities are to be ensured for smooth delivery of services and entertainment of claims.

Employees and Health Workers

9. What are the obligations of the employers with regard to the medical expenses for COVID – 19 victims or expenses for the employees?

Ans: IRDA has issued guidelines for health insurance policies, medical expenses, etc. implementation of which would require a consultancy on case to case basis.

However, these are a general set of guidelines and might or might not be applicable to all insurance policies. On a general note, any health insurance policy provided to the employee by the employer would cover the risks associated with COVID – 19.

However, it is imperative to see the specific phrasing of the terms & conditions of the insurance policy.

10. Whether any insurance is provided to the Health Workers fighting COVID – 19?

Ans: The Ministry of Health and Family Welfare in its Press Release on 26.03.2020, under the umbrella of Pradhan Mantri Garib Kalyan Package, announced an insurance cover of Rs. 50 Lakhs for a period of 90 days to public healthcare providers including community health workers, who may have to be in direct contact and care of COVID – 19 patients and who may be at risk of being impacted by this.

The said insurance cover also includes accidental loss of life on account of contracting COVID – 19. The insurance provided under this scheme would be over and above any other insurance cover availed of by the beneficiary.

Employees and Health Workers

11. What are the obligations of the employers with regard to the medical expenses for COVID – 19 victims or expenses for the employees?

Ans: IRDA has issued guidelines for health insurance policies, medical expenses, etc. implementation of which would require a consultancy on case to case basis.

However, these are a general set of guidelines and might or might not be applicable to all insurance policies. On a general note, any health insurance policy provided to the employee by the employer would cover the risks associated with COVID – 19.

However, it is imperative to see the specific phrasing of the terms & conditions of the insurance policy.

12. Whether any insurance is provided to the Health Workers fighting COVID – 19?

Ans: The Ministry of Health and Family Welfare in its Press Release on 26.03.2020, under the umbrella of Pradhan Mantri Garib Kalyan Package, announced an insurance cover of Rs. 50 Lakhs for a period of 90 days to public healthcare providers including community health workers, who may have to be in direct contact and care of COVID – 19 patients and who may be at risk of being impacted by this.

The said insurance cover also includes accidental loss of life on account of contracting COVID – 19. The insurance provided under this scheme would be over and above any other insurance cover availed of by the beneficiary.

Relief in Compliance

13. During the period of lockdown, how is one supposed to make the payment of premium, renewal, settlement, etc. for the month of March, 2020?

Ans: IRDA in a Press Release dated 23.03.2020 had issued directions to the insurance companies to ensure proper service and maintain continuity of business operations inter alia through possible alternative arrangements including telephonic and digital contact.

In lieu thereof, the insurance companies have been directed to display the information on their website for making payment and functioning of their office.

14. Whether any relaxations are provided to the insurance companies to conduct Board Meetings in this Pandemic?

Ans: The IRDA vide Circular No. IRDA/F&A/CIR/2019-20/481 dated 23.03.2020 has relaxed the conditions for Board Meetings of insurers thereby stipulating that the meetings due till 30.06.2020 may be held through video-conferencing or other audio-visual means in accordance with Rule 3 of the Companies (Meetings of Boards and its Powers) Rules, 2014 as amended on 19th March, 2020.

15. Whether any relief is provided to the insurance companies for submission of returns?

Ans: The IRDAI vide Press Release dated 23.03.2020 has extended the period for submission of monthly returns for March, 2020 by the insurance companies and intermediaries by allowing them an additional period of 15 days.

Furthermore, for submission of quarterly returns, an additional period of one month will be permitted.

16. What is the remedy available in case if the complaint of the policyholder is not redressed in the allotted time frame?

Ans: As per the Circular bearing No. IRDAI/INSP/CIR/MISC/077/03/2020 issued by IRDA on 30.03.2020, though the normal response time for policyholder complaint redressal is 15 days, however due to pandemic situation, an additional 21 days time is allotted to the policyholder in respect of all complaints received on or after 15.03.2020 and upto 30.04.2020.

However, this additional response time is not applicable to complaints pertaining to COVID – 19 for which the extended timelines will continue to apply.

Author- AMLEGALS is a multi-specialised law firm. We would love to hear your views, queries, feedback and comments on covid19@amlegals.com or rohit.lalwani@amlegals.com.

Disclaimer: The information contained in this document is intended for informational purposes only and does not constitute legal opinion, advice or any advertisement.

Author Bio

Qualification: LL.B / Advocate
Company: AMLEGALS
Location: AHMEDABAD, Gujarat, IN
Member Since: 14 Apr 2018 | Total Posts: 152
I am a litigation & arbitration advocate. I am founder of a leading full service law firm AMLEGALS. I handle litigation in indirect taxes, Insolvency & Bankruptcy Code, IPR, Arbitration, Contracts etc in High Courts, Tribunals-NCLT,CESTAT,NCLAT etc, Arbitral Tribunals and various Court of View Full Profile

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