Detailed regulations in cyber insurance mooted

The Working Group constituted by IRDAI suggest several steps to enhance coverage under cyber insurance:

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The Working Group set up by the Insurance Regulatory and Development Authority of India (IRDAI) to study cyber liability insurance has suggested that with unknown cyber risks on the rise, there must be detailed regulations to address the issue. It says in its report: “Insurers may place this matter (silent cyber issue) high on the agenda and address this problem sooner than later. Silent cyber refers to the unknown exposure in an insurer’s portfolio created by a cyber peril, which has not been explicitly excluded or included.”

The report further elaborates: “Cyber exposure is a concern for all underwriters. Cyber affirmative and silent covers are scattered in many different products beyond standalone ones. Cyber risk permeates all classes of insurance without boundaries of industries,” it says, adding: “With technology improving and digital business expanding, silent cyber risks, especially in the banking sector, have also increased.”

GAPS NEED TO BE BRIDGED

The working group feels that while the current offerings are addressing the requirements of individuals reasonably well, there are a few gaps, some of them relating to product features and the others to processes involved. It says while it may not be possible to address all these gaps, attempts can be made, in respect of some gaps, either to respond fully or partially.