Insurance Regulatory and Development Authority of India (IRDAI) has constituted a
nine-member working group to consider a proposal to set up a pandemic risk pool for the Indian insurance industry.
IRDAI member (non-life) T L Alamelu in an order issued on 8 July 2020 said, “There is a need to examine long-term solutions to address the various risks which have been triggered by the current pandemic and offer protection in case of a similar crisis in future.
“Some of the risks like business interruption losses without concurrent material damage loss and loss of employment would result in huge losses much beyond the capacity of government/insurers/reinsurers.”
“Therefore, there is a need to explore the possibility of addressing these risks and any other related risks arising out of a pandemic through the mechanism of a pandemic risk pool,” Ms Alamelu said.
The working group will be headed by IRDAI executive director Suresh Mathur and the terms of reference for the group will include:
a) Study the need for setting up a pandemic risk pool giving rationale for the same
b) Recommend the structure and operating model for the pool
c) Examine any other matter relevant to the subject
The working group has been asked to submit its report within eight weeks.