Electronic Insurance policy soon to be a reality for customers

The insurance regulator has issued guidelines for electronic issuance of insurance policies as well as Insurance Repositories. 

The term “e-Insurance policy” means a policy document which is an evidence of insurance contract that has been issued in an electronic form. This issuance will take place through an Insurance repository that will hold “e-insurance account” which will be a reflection of all insurance policies held by a policyholder.  

Insurance Regulatory and Development Authority (IRDA) will grant certificate of registration to Insurance repositories. Insurance companies that issue and maintain ‘e insurance policies’ will have to mandatorily utilize services of these repositories.

Life insurance policies including pension plans and health plans, general insurance policies like car insurance, health insurance etc are eligible to be issued and held in electronic form. E-insurance account can be opened by individuals who have insurance policies as well as those proposing to take a policy. Minors can also hold an ‘e-insurance account’ but it has to be opened by their guardian. 

Before opening an account, the customer will have to provide details of their PAN card or Aadhar card as an ID proof along with a photograph.  They would also have to submit an address proof – Ration card, Passport, Aadhar letter, Voter ID card, Driving license, Bank Passbook etc. Each individual can open only one such account. 

Every insurance policy that is electronically issued will have a unique identification number with details of policyholder, nominees and beneficiaries. It will also hold the history of claims data, a record of instructions exchanged between the policyholder and the insurer. Policyholders will be able to pay premiums online through the repository.     

Insurance repository will have to issue the insurance policies within the time specified. Any delay will result in a penalty of Rs 1 lakh for each day. 

There are certain eligibility norms for a company to apply as an Insurance repository. The company must be a public limited company with minimum share capital of Rs 5 lakhs, they should have no foreign direct investment, they should ensure that the integrity of the data is maintained, have sufficient backup etc.