IRDA constitutes working group to explore a Pandemic Risk Pool

MUMBAI: Insurance Regulatory and Development Authority (IRDA) on Tuesday announced that it has constituted a working group to study the possibility of creating a ‘pandemic risk pool’ to come up with a long term solution to deal with economic fallouts of a future such pandemic.

“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,” IRDA said in a statement.

The nine-member working group is headed by IRDA’s executive director Suresh Mathur and has representatives from regulators, reinsurers and insurance companies.

The insurance regulator said that such a risk pool in the future could offer protection for business interruption without material damage, loss of income and livelihood and other related pandemic related losses currently not insured in India.

These losses could be huge and beyond the capacity of the government, insurance companies or even reinsurers to support on its own. Therefore, said IRDA, “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”.”

The working group has been asked to submit its recommendation in eight weeks and among other terms have also been asked to detail the structure and operation of such a pandemic risk pool.