Irdai panel to examine ‘pandemic risk pool’

The Insurance Regulatory and Development Authority of India (Irdai) has constituted a panel to study the need for setting up a 'pandemic risk pool' due to the disruption in the economic activity caused by the Covid 19 pandemic.

“Covid-19 pandemic which started as a public health crisis has led to significant disruption in economic activity mainly due to the measures taken to limit the spread of the disease. It has affected not just health but all sectors of the economy including but not limited to manufacturing, aviation, tourism, transportation, construction, services, agriculture and many others. 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 future similar crisis. Some of the risks like Business Interruption losses without concurrent Material damage loss, Loss of employment would result in huge losses much beyond the capacity of government /insurers /reinsurers,” said the regulator in a statement.

“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” it said.

The working group would be required to study the need for setting up a pandemic risk pool, recommend the structure and operating model for the pool and submit its report within eight weeks.