New Delhi: 

Amidst massive economic devastation caused by the Caronavirus Pandemic, the Indian government has initiated discussion on a proposal to set up of a “Pandemic Pool'' with the help of some reinsurers led by the GIC Re, for exclusively providing cover against loss of income of vulnerable section of the economy during any future lockdowns due to epidemic and pandemic in the country, said the central government sources. 


The proposed “Pandemic Pool’’ will facilitate the transfer of the loss of income risk to the extent possible and can guarantee a regular pay-out for a specific time frame to these affected individuals so that liquidity can be maintained in the economy and people of the lower strata can sustain the crisis.The state government concerned at its level can sort insurance protection for this vulnerable section of the society. The economic risk associated with such outbreaks can thus be transferred to the insurance. 


The concept such a “Pandemic Pool'' has recently been mooted by the Axa Re,the French multinational re/insurance company, said the central government sources. 


It is mooted that that the `Pandemic Pool’’ will cover employees/worker with a gross income of upto Rs 2.5 lac per annum and benefit of Rs 5000 per month for a period of two months can be envisaged.The premium to the Pandemic Pool for covering any loss of income  can be paid by the central and state governments. Pandemic or Epidemic resulting into temporary loss of Income due to mandatory lockdown of office premises or lay off of employees can trigger the claim payments


Going by the current experience where the nationwide lock down has hit everybody hard particularly the lowest rung of people, many of whom work in the unorganized sector,there have been suggestions from central government, a  few state governments and trade and industry bodies like Confederation of Indian Industry and FICCI to launch such a cover in the country.


There are few insurance products available in the Indian market but limited in terms of both scope and benefit. These plans are not available independently and have to be taken as add-ons with a Housing Loan Protection Plan or a Critical Illness cover. Pandemic is generally not covered under such policies.


The government which was earlier thinking to set up a “Natural Catastrophic Pool’’ to compensate losses of the poor people out of the natural disasters, may now plan to merge it with the “Pandemic Pool'', said government sources   


Recently,the CEO of AXA Thomas Buberl has suggested the industry should look to create an insurance scheme to adequately cover future pandemics. 


In an interview with France's Sunday newspaper Le Journal du Dimanche, he had said one idea would be to have a pooling system involving government and private insurers.


He said AXA was ready to take the initiative to partner with the French government to establish an insurance scheme specifically for pandemics.

Once pandemic is declared by World Health Organisation (WHO) or any government agency of India leading to lockdown of premises of establishments in which covered workers work, the establishments provide the list of affected employees to the Government. 


The government then certifies the list of such employees and provide it to the insurance company(Axa Re)  with pre decided documents. Insurance company after verifying  the authenticity of the claims through minimum pre-defined process can pay the specified amount for the specified period..


Some of the main features and process flow of the proposed scheme  are:
• Insurance cover for providing compensation to the individuals at the time of loss of income due to Epidemic or Pandemic affecting the establishment they are working in,
• Scope of cover in terms of who all will be covered under the scheme and compensation/claim amount to be given in case claim triggers, is decided by the Government. It is recommended that employees with a gross income of upto Rs. 2.5 lac per annum can be considered for the purpose of this scheme and benefit of Rs 5000 per month for a period of 2 months can be envisaged,
• Government provides the list of all such employees to the insurance company along with an agreed premium for the risk. Such list can be prepared with the help of EPFO department who has details of all the employees of the state and various boards like building and other construction workers board etc. with which the workers are registered,
• Pay-out of Rs 5000 per month for a period of 2 months for all affected workers is made on monthly basis. This pay-out is given by the insurance company to same authorised government/department/nodal agency only which then hand over this compensation to concerned establishment or the affected person directly. Insurance company settle the claim within Turn around Time on completion of documents, as decided before the start of the scheme,


Although the situation is similar for all, but the lower grade service class are affected the most as they do not have enough cash to tide over the crisis triggered by the Pandemic or Epidemic.

This kind of people are the most vulnerable in the event of an Epidemic or Pandemic as they are the first ones who face the brunt of economic crisis and most of them lose their jobs within the first couple of days/weeks. Govt of India and almost all the State Governments are taking measures to help these people by providing them food and shelter.


Meanwhile,more than Rs 36,659 crore has been transferred to the bank accounts of 16.01 crore beneficiaries using direct benefit transfer (DBT) between March 24 and April 17 during the lockdown, the finance ministry said on Sunday.


"More than Rs 36,659 crore has been transferred by using Direct Benefit Transfer (DBT) through the Public Financial Management System (PFMS) in the bank accounts of 16.01 crore beneficiaries by the Controller General of Accounts (CGA) office during COVID-19 lockdown," the ministry said in a statement.


The cash amount has been transferred by using Controller General of Accounts' (CGA) digital payments technology Public Financial Management System (PFMS) under Central Schemes (CS) and Centrally Sponsored Schemes (CSS). DBT ensures that the cash benefit is directly credited into the account of the beneficiary, eliminates leakage and improves efficiency.