London — Forcing retroactive payouts to cover business disruption losses resulting from the coronavirus pandemic could ultimately put financial stability at risk, global insurance regulators said.
Where pandemic risks are covered by a policy, insurers should pay out such claims in a prompt and efficient manner, the International Association of Insurance Supervisors said, while cautioning “against initiatives seeking to require insurers to retroactively cover Covid-19-related losses”. A global financial industry body, the Institute of International Finance , has also warned that retroactively changing policies could lead to “decreased availability of insurance, the withdrawal of insurers from certain markets, and overall increases in the price of available coverage”.
In its statement, the IAIS said that the pandemic highlights the limits on the types of coverage that can reasonably be offered by the insurance sector alone.