Responding to the ongoing Covid-19 epidemic, the Insurance Regulatory and Development Authority of India (IRDAI) has granted retail health insurance policies issued by general and health insurance companies (the insurers) till March 31, 2022, freedom to issue health insurance policies in electronic form without requiring a physical signature and wet signature on the proposal form. On September 10, 2020, the insurance regulator authorized health and general insurance corporations to get policyholders' approval via the digital method for those who have significant challenges in obtaining new policies by submitting physical forms or completing physical paperwork.
The relief to require a wet signature on the proposal form of an insurance policy was previously valid until March 31, 2021, however, IRDAI extended it until September 30, 2021 in the aftermath of the second wave of the outbreak. According to the circular issued on 24th March 2021, IRDAI had earlier stated that "In partial modification of Clause No. 5 of the above referred guidelines dated 10.9.2020 insurers are allowed to issue electronic policies and dispense with physical documents and wet signature on the proposal forms as specified in the within referred guidelines up to 30.9.2021."
That being said, because the epidemic is still in the ongoing phase across certain regions of India the exemption has been maintained until March 31, 2022.
On September 14, 2021, IRDAI issued a circular announcing the extension. The regulator has mentioned in the circular that "In view of the continuing situation of Covid-19 pandemic, in partial modification of Clause No. 5 of the within referred circular dated 10th September, 2020 the timelines for (a) Issuance of electronic policies and (b) dispensing with physical signatures and wet signature on the proposal form in respect of health insurance policies, stand extended up to 31st March,2022."
Issue of electronic health insurance policies:
IRDAI, in a circular dated September 10, 2020, allows an exemption for the issuance of electronic health insurance plans, subject to the following conditions.
i) Insurers shall send the policy document and a copy of the proposal form through digital/electronic mode. They shall be sent to the registered e-mail id or mobile number provided by the customer only on the specific consent provided by the policyholder.
ii) Simultaneously the policyholders shall be informed through SMS that the policy document /copy of the proposal form has been sent to their e-mail id or any other digital/electronic mode (as may be the case).
iii) Insurers shall put in place a proper mechanism to ensure that the documents are delivered to the designated e-mail Id / mobile number of the policyholder and an acknowledgment is appropriately obtained / auto-collected on delivery.
iv) When documents are forwarded by electronic means, the mechanism of the policyholder having received the document or the electronic platform having delivered the documents shall be maintained. It shall be clearly informed to the policyholder that the date of delivery of the document is reckoned for the purpose of considering any applicable free look requests.
v) Insurers shall preserve the records of such acknowledgments for further reference.
vi) The policy document sent electronically shall contain all the schedules, terms and conditions, benefits etc that are otherwise available in the physical document.
vii) Policyholders shall be also informed that printing of physical policy document and dispatch of the same along with the copy of the proposal form may be delayed due to operational difficulties in the wake of the ongoing COVID-19 pandemic situation.
viii) The policy document sent electronically is as valid as the physical policy contract/document. Wherever the policyholder demands the physical version of the policy document/copy of the proposal, the same shall be made available.
ix) Wherever policy documents could not be sent through electronic means due to any reasons, the companies shall compulsorily forward the physical documents to the policyholders.
Dispensing of wet signature on proposal form for Health Insurance Policies:
According to the circular published on September 10, 2020 by IRDAI, insurers are permitted to acquire individual's approval without having a wet signature on the hard copy of the proposal form if the following conditions are met:
a) The completed proposal form shall be sent to the prospect on his / her registered e-mail ID or mobile number by means of a message with a link, as the case may be.
b) If the proposer wishes to give consent to the proposal, the same may be permitted by providing a link for confirmation or through One Time Password (OTP) duly validated.
c) Insurers shall maintain verifiable, legally valid evidence for the proposer's consent received for the fully completed proposal form.
d) Insurers shall be responsible for the following:
i. Providing approved digital sales material to insurance agents/intermediaries and ensure that only that material is used while soliciting the business;
ii. Authenticating the e-mail IDs / mobile numbers of the proposers including through de-duplication of the data and such other means;
iii. Ensuring the suitability of the product being sold.