Renewability, Mitigation and Portability of COVID Specific Products

COVID-19 entered India in March 2020. Since the start of March till now, the cases of COVID-19 are rising in our country. To meet the expenses of COVID-19 treatment, the Insurance Regulatory and Development Authority of India (IRDAI)  issued many insurance schemes especially for COVID-19 like the ‘Corona Rakshak Policy’, ‘Corona Kavach Policy’ and ‘Group Corona Kavach Policy’. These insurance policies cover the expenses of COVID-19 treatment of the insurers.

The IRDAI issued a notification on Tuesday, which provides modifications in the guidelines of COVID specific standard health products, i.e. ‘Corona Rakshak Policy’, ‘Corona Kavach Policy’ and ‘Group Corona Kavach Policy’. As per the modifications, the insurers of these three policies have the choice for renewal, mitigation and portability subject to certain conditions mentioned in the notification.

The modifications provide for renewing any tenure of ‘Corona Rakshak Policy’ and ‘Corona Kavach Policy’ to a further term of three and half months, six and half months or nine and half months, whichever option the policyholder chooses. The renewal will be subject to the underwriting policy of the insurer. The renewal of these policies must be before the expiry of the existing policy contract.  After the renewal of these policies, the additional waiting period of 15 days will not apply, and it will continue the coverage seamlessly.

The policyholder may change the insurance amount at the time of renewal.  If there is an increase in insurance amount, then the waiting period will start afresh only for the increased amount of insurance. There can be a renewal of ‘Corona Rakshak Policy’ and ‘Corona Kavach Policy’ till 31 March 2021. 

Also Read: IRDAI Report on Microinsurance Company, Suggested Recommendations

In the case of ‘Corona Kavach Policy’, insurers have a choice to mitigate to any other indemnity based health insurance product offered as per their selection. In the case of ‘Group Corona Kavach Policy’, the insurers can provide a choice of mitigation to the insured members under it. They can offer the members under this policy for mitigating to any other individual indemnity based health policy at the time of exit of these members from the group policy. The members can also choose to mitigate at the time of cessation of coverage of the group policy.

If the insurers choose to mitigate, then the accrued gains of the waiting period served in the ‘Corona Kavach Policy’ or ‘Group Corona Kavach Policy’ will be protected in respect of coverage for COVID-19, in the mitigated policy.

The notification permits the General and Health insurers to allow portability of ‘Corona Kavach Policy’ from one insurer to another.  If the insurers choose for portability, then the accrued gains of the waiting period served in the ‘Corona Kavach Policy’ will be protected in respect of coverage for COVID-19, by the porting-in insurer.

The notification gives the option to the insurers for mitigation or portability of ‘Corona Kavach Policy’ or ‘Group Corona Kavach Policy’. Such mitigation or portability is permitted to any other comprehensive health insurance policies till the end of the existing ‘Corona Kavach Policy’ or ‘Group Corona Kavach Policy’. The IRDAI has taken positive steps towards helping insurers by providing the option of renewability, mitigation and portability of COVID-19 specific policies.

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