Demat like facilities for insurance policy holders soon, all policies to be held in electronic form only
Sep 30, 2022
IRDAI proposed that every insurer shall issue all insurance policies only in electronic form notwithstanding whether the proposal is received in electronic form or otherwise. Read the key proposals from IRDAI draft guidelines
The Insurance Regulatory and Development Authority of India (IRDAI) has proposed mandatory issuance of all insurance policies in electronic form. If the proposal is accepted all the new policies will be issued electronically. Moreover, the regulator has also proposed that the insurer should provide the facility of e-insurance policies to existing policyholders.
IRDAI has suggested that insurance companies should offer discounts to policyholders if they buy them directly from their electronic platforms.
In order to enable electronic issuance and maintenance of insurance policies, IRDAI has recently reviewed the existing regulations on the issuance of e-insurance policies and proposed a few key changes.
IRDAI in its Exposure Draft - Insurance Regulatory and Development Authority of India (Issuance of e-Insurance Policies) Regulations, 2022 issued on September 29, 2022 said, “To promote efficiency in the conduct of insurance business by enabling the insurers to establish an appropriate framework by adopting technology to build capabilities: a) for solicitation of insurance business through an electronic platform, b) to issue e-insurance policies procured either through an electronic platform or otherwise. c) to mandate the use of electronic insurance accounts for holding e-insurance policies.”
Here are some of the key proposals from IRDAI’s draft guidelines:
1) Every insurer soliciting insurance business through electronic mode either directly or through the insurance intermediaries shall have an e-proposal form along with the physical proposal form, with respect to the product being solicited. E-proposal form shall also include the suitability assessment form, customised benefit illustration, as per the extant provisions applicable.
2) "The e-Proposal procured directly or through the insurance intermediary shall be allowed only through the electronic platform. In case of solicitation of business other than through electronic platform, every insurer shall establish systems in place to capture or transpose the information submitted through the physical proposal to electronic form," the regulator said.
3) Every insurer shall issue all insurance policies only in electronic form notwithstanding whether the proposal is received in electronic form or otherwise.
4) "Electronic insurance account (eIA) shall be mandatory for every policyholder and all policies issued to the policyholder shall be held in the eIA of the policyholder," the regulator proposed.
5) Every insurer should have a mechanism to create a unique eIA number for each policyholder through any one of the registered Insurance Repositories as opted by the policyholder, as IRDAI mentioned in the draft guidelines.
6) The insurance companies will forward a copy of the e-insurance policy along with the proposal form, benefit illustration, and other relevant documents to the registered email of the policyholder, wherever available.
7) "Every insurer shall, on the issuance of electronic policies to the eIA, communicate to the policyholder through the registered email id of the policyholder, where available, and SMS to the mobile number of the policyholder informing, issuance of electronic policy and copies of the proposal form to the eIA and also draw attention to the provisions of free look period in the respective Regional, Hindi and English languages," the regulator proposed.
8) "Every insurer must provide the existing policyholder the facility of the electronic insurance policy. All the existing policies shall be issued to the Insurance Repositories within 12 months from the effective date of these regulations, and inform policyholders...," proposed IRDAI.
"For policyholders, the hassle of maintaining copies of insurance policies year on year is expected to be eliminated completely and access to policy would now be possible in a few clicks. The draft guidelines also stress on digital servicing of claims basis insurance policy as available in the policyholder’s e-insurance account, which will help simplify the claims process overall and help eliminate redundancies currently observed in physical practices," said Susheel Tejuja, MD at PolicyBoss.com.
"For insurance agents and intermediaries, this will effect greater operational ease and better policy management and servicing capabilities," he added.
The regulator has asked all stakeholders to share their comments on the proposed guidelines by October 20, 2022.
[The Economic Times]