IAIS press release on steps to mitigate the impact of COVID-19 on the insurance sector

The IAIS, the Financial Stability Board (FSB) and other standard-setting bodies have been working together to assess the impact of COVID-19 on the global insurance sector

08 May 2020

By Ciara Davies.

These discussions have highlighted the importance of effective policyholder protection and fair customer treatment at this time.

In circumstances where pandemic risks are covered by a policy, it is important that insurers pay out the claims in a prompt and efficient manner. However, the IAIS cautions against seeking to require insurers to retroactively cover COVID-19 related losses, such as business interruption, that are specifically excluded in existing insurance contracts. In those cases, the costs of claims against losses have not been built into the premiums that the policy holders have paid for their insurance. The concern is that such initiatives will threaten policyholder protection and financial stability, ultimately aggravating the financial and economic impacts of COVID-19.

The press release concludes by saying that the pandemic has highlighted the types of coverage that the insurance sector can reasonably offer.

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