The Insurance Regulatory and Development Authority of India (IRDAI) is considering a proposal to set up a 'pandemic risk pool', which will also offer protection in case of a similar crisis in the future.
In order to address various risks that have been triggered by the Covid-19 pandemic, the Insurance Regulatory and Development Authority of India (IRDAI) is considering a proposal to set up a ‘pandemic risk pool’, which will also offer protection in case of a similar crisis in the future.
The regulator has set up a nine-member committee and the panel is said to form the structure and operating model for the pool and submit its report in 8 weeks.
According to The Indian Express, the regulator and the industry are planning to set up a pandemic insurance pool to tackle the Covid-19 type of virus attacks, on the lines of terror insurance pool, that claimed a lot of lives and hit the economy and livelihood of millions of people.
A risk pool is a type of risk management practiced by insurance companies, wherein insurance companies come together to contribute money and form a pool that can provide protection to insurance companies against catastrophic risks such as earthquakes or floods or a pandemic. Such claims will be taken care of by the pool.
To address the various risks which have been triggered by the COVID-19 pandemic, Irdai said there is a need to examine long-term solutions and offer protection in case of a similar crisis in the future.
The insurance regulator said, “The pandemic has affected all sectors of the economy, not just health, including but not limited to aviation, tourism, manufacturing, transportation, construction, services, agriculture, etc.”
The working group set by IRDAI will study the need for setting up a ‘Pandemic Risk Pool’, giving the rationale for the same. Experts say, with that, we will be somewhat prepared for any such issue in the future.