Written by : Knowledge Centre Team
2025-12-28
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The COVID pandemic profoundly impacted individuals,families,business world and the global economy on an unprecedented scale. Among the most affected sectors was insurance, which had to address emerging health and financial risks.
In India, as the nation entered extended lockdown phases in 2020, the Insurance Regulatory and Development Authority of India (IRDAI) ensured that insurance services remained functional, subject to social distancing norms and safety protocols. These early measures laid the groundwork for longer-term reforms that continue to shape the industry in 2025.
Policyholders faced challenges such as delayed premium payments and disruption in physical service channels, issues that were especially pressing during a health crisis. The situation was monitored proactively by IRDAI, and it came out with some measures to help the insurance sector and its policyholders.
Key Takeaways
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March 4, 2020: Guidelines on Handling of Claims Reported Under Coronavirus by IRDAI
According to this circular, the IRDAI directed insurance companies to promptly settle COVID-19-related hospitalisation claims and offer coverage for allowable medical expenses during the quarantine period, according to policy terms. Such claims were disallowed only following a thorough examination by the review committee of insurance claims.
Insurers were asked to design products that would help allay treatment costs for COVID-19 and meet health needs for various sections of the population. As such, they came out with some unique products for individuals as well as groups. These included cover for corporate travel when the pandemic subsides.
March 23, 2020: IRDAI Circular On ‘COVID-19 Global Pandemic Related Instructions To Life Insurers’’
According to this instruction, the IRDAI covered four issues:
- Functioning of offices
- Grace period for payment of premiums
- Claims
- Periodic reports
About partial or full closure of offices, the IRDAI indicated that providers of life insurance policies had to notify policyholders by e-mail, SMS, Press releases, etc., apart from notifications on the branch office. Life insurers were additionally directed to showcase on their website a list of non-functioning offices, and alternate arrangements for servicing policyholders, contact details for any emergencies, information on Covid-19 death claims and specific information on the admissibility of claims under health insurance contracts.
The IRDAI also allowed an additional grace period of one month for premium payments of all life insurance policies due in March 2020. Insurers were also asked to maintain separate data on Covid-19 claims, which must be submitted to the IRDAI upon request. For superior monitoring of the COVID-19 scenario, insurers were directed further by IRDAI to submit reports on offices closed partially/ fully and other steps taken, every fortnight.
March 30, 2020:COVID 19 Related Instructions From IRDAI
These were comprehensive instructions on the Pandemic situation, issued to all classes of insurers. The IRDAI urged insurers and other regulated bodies to operate their offices with only the required staff, ensuring that essential insurance services, such as claims settlements, policy renewals, authorisations for hospitalisation, and other similar activities, are maintained. The regulatory body has also instructed office staff of insurers, including intermediaries and agents, to work from home.
Insurers were also asked to display on their website a dedicated helpline number for policyholders and another helpline number for other stakeholders, such as intermediaries and agents. Additionally, insurers were asked to come up with business continuity plans that deal with processes, reporting, transactions, and customer services to be handled seamlessly, concerning the present situation. A copy of the plan had to be submitted to the IRDAI.
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April 1, 2020 and April 15, 2020: Ministry Of Finance Notifications/April 3, 2020 and April 16, 2020 IRDAI Circulars
Under these notifications, policyholders whose third-party motor insurance and health insurance were due for renewal from March 25, 2020, to April 14, 2020, were given an allowance to make premium payments until April 21, 2020, to ensure continuity of these covers from the date on which the policy comes up for renewal.
The IRDAI also clarified that insurers had to cover risks in cases where renewal premiums were due but could not be paid.
April 4, 2020: IRDAI Circular
According to this, the IRDAI permitted an additional 30-day grace period for all life insurance premium payments due in March and April 2020. To protect policyholders of best life insurance from a volatile market, for policies maturing up to May 31, 2020, the IRDAI ordered insurers to offer policyholders a one-time option to avail of settlements as per Regulation 25 of the IRDAI.
April 8, 2020: IRDAI Circular
The RBI (Central Bank) issued directions on a moratorium for repaying term loans to alleviate the difficulties of borrowers. Therefore, the IRDAI permitted insurers to grant a three-month moratorium on paying instalments due between March 1, 2020, and May 30, 2020. The repayment schedule would be shifted by 3 months in term loans.
April 13, 2020 AND April 24, 2020
The IRDAI outlined the severe financial implications which lie ahead for the insurance industry. It instructed the boards of directors of insurance companies to critically examine their solvency margin and capital availability as needed during the current financial year, 2020-2021. They must devise strategies to ensure that they have enough resources and capital available to them.
April 16, 2020: Circular Of IRDAI
The IRDAI repeatedly emphasised that medical insurance is mandatory for all workers in establishments that remain active during the nationwide lockdown.
APRIL 18, 2020: CIRCULAR OF IRDAI
For easing pressure on health care infrastructure during the pandemic, the IRDAI indicated to all insurers that decisions on the authorisation of cashless treatment were communicated to the network provider hospital within 2 hours of receiving the authorisation request and the last necessary request from the hospital, either by the insurer or TPA (Third Party Administrator).
Since life has been turned upside down by the pandemic for insurers, policyholders, insurance agents and other stakeholders, the IRDAI continually monitors developments closely and takes suitable measures for steering the ship in stormy waters.
The Lasting Impact of IRDAI's Pandemic Measures
The circular dated April 18, 2020, which aimed at reducing pressure on the healthcare system through faster authorisation of cashless treatment, marked one of the final immediate responses by IRDAI during the early stages of the pandemic. In the months and years that followed, several long-term developments were observed across the insurance sector.
- Rise in Digital Processes: Insurance companies, intermediaries and third-party administrators gradually shifted to digital servicing models. From online premium payments and digital KYC to teleconsultations and virtual customer support, several processes became remote-enabled. These changes improved efficiency and allowed uninterrupted policyholder servicing during lockdowns.
- Introduction of Standard Products: The regulatory body also initiated steps to standardise insurance offerings. Products such as Arogya Sanjeevani and COVID-specific policies were introduced, featuring uniform terms and conditions across insurers. These efforts helped improve product transparency and assisted customers in making informed choices.
- Focus on Financial Preparedness: Insurers were required to assess their capital adequacy, solvency margins, and operational risks more critically. Business continuity plans were reviewed to ensure uninterrupted operations in the event of future emergencies. The board of directors of insurance companies were advised to take proactive steps to maintain financial stability.
- Ongoing Supervision in the Current Scenario: As of 2025, the IRDAI continues to closely supervise the sector. The regulatory body is reviewing claim settlement systems, grievance redressal mechanisms, and overall service delivery. It has also initiated steps to strengthen the National Health Claims Exchange, with the objective of improving transparency in hospital billing and managing rising healthcare costs.
Conclusion
The COVID-19 pandemic brought about significant and lasting changes in the insurance regulatory landscape. The timely interventions by IRDAI ensured continuity of services, protection for policyholders, and a shift towards more resilient, technology-driven operations. Many of these changes, such as extended grace periods, digital claim processing, and standardised policies, have contributed to building a more robust and responsive insurance ecosystem.
As the sector continues to evolve in 2025, it is crucial for policyholders to stay informed and select insurance solutions that align with their evolving needs and financial objectives.
If you are looking for a reliable plan that offers comprehensive protection and flexible benefits, you may want to explore the term plans offered by Canara HSBC Life Insurance. Our plans are designed to offer continued support in both routine and unexpected times.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
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