IRDAI (Insurance Regulatory and Development Authority of India) has circulated a draft, which mandates issuance of policies in an electronic form above a certain premium limit. This move is aimed to further enhance the process and system interaction between an insurance company and an insurance repository.
The regulator has proposed to make it mandatory for insurers to issue all new life insurance policies with annual premium above Rs 50, 000 in an electronic form. Insurers will have to seek policyholders’ consent while issuing the electronic policy.
The proposal also stretches to the general insurance products. The proposed rule will also apply to new motor and health insurance policies, if the annual premium is more than Rs 10,000. Similarly, group life and health insurance policies provided by organizations employing over 50 employees will have to be issued in an electronic form.
Even if the policyholder insists on a physical policy, the insurer will have to issue it in both the electronic and physical form. This will ensure that all new high-value life insurance policies will be available in an electronic form & thus maintain process uniformity across the industry.
Couple of years back, the insurance regulator of India authorized 5 repositories to create E-insurance accounts — NSDL, Central Insurance Repository, CAMS Insurance Repository, Stock holding Corporation of India (SCHIL) and Karvy Insurance Repository.
