on May 11, 2021)HYDERABAD: After receiving multiple complaints of some insurance companies not issuing the Corona Kavach and Corona Rakshak policies, the Insurance Regulator and Development Authority of India (IRDAI) on Monday reiterated that it is mandatory for all general and health insurers to offer these standard Covid-19 policies to policyholders.
In the wake of the first wave of Covid-19 last year, IRDAI had directed all non-life insurance companies to roll out these two standard Covid-19 policies by July 10, 2020.
This was mainly targeted at people who did not have any health insurance cover. These policies were earlier permitted to be offered till March 31, 2021, and with second wave hitting the country, the regulator allowed insurers to offer and renew these standard Covid policies up to September 30, 2021.
An industry expert pointed out that the rising Covid claim ratios have been pinching insurers. He pointed out that the pricing of standard Covid products, that were fixed last year by insurers, do not seem viable anymore in the face of rising Covid claims.
“When we priced it and launched these policies, no one had the visibility of the numbers… but at the same time, no one had predicted that the numbers could go so bad within a year…we took a hit last year, but it is difficult to continue like this. Therefore, many insurance players are no longer pushing this policy,” another industry source said.
Besides he added that revising the premium of such policies, where sum insured is not very high, does not make sense even for sellers of the policy as well as buyers.
While Corona Kavach is an indemnity-based product, Corona Rakshak is a benefit-based product.
While benefit policies pay a fixed amount following a claim, indemnity plans provide either cashless or reimbursement for the money spent on medical treatment.
Both are offered for a tenure of three and half months, six and half months or nine and half months.
While the sum insured in Corona Kavach ranges between Rs 50,000 to Rs 5 lakh, in Corona Rakshak, it ranges between Rs 50,000- Rs 2.5 lakh.
Till January, around 1.28 crore standard Covid policies with a total premium of over Rs 1,000 crore were sold by insurers.
