The IRDA has now introduced Introducing the facility of holding the insurance policies in an electronic form (similar to the demat facility on stocks). In defining the objectives of an Insurance repository, IRDA has stated that this is to provide policyholders a facility to keep insurance policies in electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy in order to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies.
The insurance repository (similar to NSDL for stocks) is like a one-stop shop for a policy holder, for viewing, amending personal details like name, address etc for all Insurance policies.
It is required that every insurer enter into service agreements with all insurance repositories that have been granted a certificate of registration by the Authority for issuing and maintenance of e insurance policies. What this means is that as a customers, you can have only one “e-Insurance Account" and all your policies whether health, life, or any other from all insurance companies will be available as an e-insurance policy on this account.
The e-account can be opened by existing policy holders or potential insurance policy holders. It can be also opened for a minor by his legal and natural guardian, who proposes the life of minor for taking a life insurance policy.
The KYC will depend on whether you approach the repository directly to open an account or via an insurer. If you go through the insurance repository then it will have to carry out the due diligence for establishing the genuineness of your identity. You will have to give documents for identity and address proof.
However, if you choose to open the account through an insurer, he/she will collect the requisite documents from you on the repository"s behalf. Once the account is opened, any basic KYC compliance will be waived to avoid duplication of paperwork.
While the Demat accounts for stocks and shares entail an account opening and maintenance charge, IRDA has very categorically stated that , “No cost of e-insurance (account) shall be collected from e-insurance account holders, either by an insurance repository or an insurer."
IRDA has further guided that the insurance repository should make provisions to enable the policyholder to pay the premiums online through the portal of the insurance repository. Every insurance policy held in e-Insurance Account shall be identified with a unique policy number as allotted by the insurer. And should you have any concern or compliant, in addition to the offices of insurance companies, you can reach out to the insurance repository as well since it is also purported to be a servicing center to for the e Insurance Policies held in the eIA by them.
It is also required that every insurance repository submit a statement of insurance policies held in the electronic form to every policyholder to his address at least once in a year. The statement at minimum shall contain the insurance policy number, the type / nature of insurance policy and the insurer by whom the policy is issued. The same shall be forwarded at least once in a year to the postal address submitted by the policyholder.
While the Insurance providers feel that the roll out of this will entail significant effort on account of the huge number of existing policies, but in the long term this is a win-win situation for both the policy holders on account of the increased operational convenience and a cost-saver for the Insurance companies.
Some Terms to be familiar with:
- "e-Insurance Account" is the portfolio of insurance policies of a policyholder held in an electronic form with an insurance repository.
- “e-Insurance policy" means a policy document which is an evidence of insurance contract issued in an electronic form through an Insurance repository.
- “Insurance Repository" means a company under the Companies Act, 1956 for maintaining a data of insurance policies in electronic form on behalf of insurers including the history of transactions during the term of policy.