“All Life Insurance Companies will not invoke the ‘Force Majeure’ Clause in case of COVID-19 death claims.”
Our Newsflash for the month of March, 2020-Vol I, explained the key elements that are recognizable for invoking a Force Majeure Clause, typically when either party to the contract is prevented from performing or unable to perform any of its obligations under the contract on account of unforeseen circumstances.
A Force Majeure clause in life insurance policies usually enables life insurers to temporarily suspend the claims during the happening of an event such as natural calamities, strikes, riots, war, civil unrest and bandhs. However, considering the present COVID -19 pandemic situation, the Life Insurance Council has vide a press release dated 2nd April, 2020 clarified that the clause of ‘Force Majeure’ will not apply in case of COVID-19 death claims. In other words, the force majeure clause will not have any impact on the insurance contracts of policyholders during COVID-19 and that the performance of the terms and conditions in the policy shall continue to operate. The Council has further clarified that in case of COVID-19 death claim, both private and public insurance companies shall continue to honour such claims subject to the terms and conditions of the Policy.
