News 109 views March 23, 2019

“Go Digital” Seems to be the New Mantra of IRDAI

Summary: IRDAI may opt to go completely digital. Physical documents may be replaced by insurance policies issued online. Though many people are now in favor of buying insurance online, the tendency to accept insurance documents in a physical format still remains. The amendment proposed by the IRDAI, if passed, will ensure the entire insurance process paper free.

E-Insurance || Digital Insurance- IRDAI New Mantra for Insurance

Storing physical documents, be it of investments you may have made or insurance policies bought, may be a cumbersome process. In addition, the amount spent on storing them carefully from theft or termites adds to the cost of having policy documents issued in physical form. However, with the country on the path of continuing digital progress, the Insurance Regulatory and Development Authority of India (IRDAI) is planning means to mandate policy issuance electronically. As opposed to the current norms of handing over insurance documents to policyholders, the insurance regulator may bring about necessary amendment in regulations to ensure policy issuance only through the insurance repository.

The proposed amendment may gradually do away with the current practice of disallowing physical policies issuance. In a move to strengthen the regulator’s aim to issue policies through the online mode only in future, it has already issued directions to store the electronically issued policies on an e-account.

Tracing the path to digital progress

Though the idea of utilizing the web is gaining ground, roughly 2 million out a total of 300 million insurance policies have already been issued through the digital mode. Though customers can submit either Aadhaar Number, PAN details during the KYC process, most customers prefer to use their PAN only for identification purposes while opening an e-insurance account. Though insurers are gradually putting in place mechanisms to enable their customers to store details of their policies through the online way, bringing all customers on board the digital platform would require considerable time.

How Does E-Insurance Account Work in India?

The idea of having an e-Insurance Account first gained ground in 2013 with the former Finance Minister P Chidambaram unveiling the service, deemed as the first such kind of service that would allow insurers to issue insurance online while relieving them of the burden of issuing policy documents in physical form or storing documents containing necessary details of their customers.

Insurers offer the e-Insurance format to their policyholders so that they may store all their policies in a digital format. Maintained by the IRDAI in an electronic format, this platform acts as a one-stop solution to meet myriad policy service requirements. Just like any other digital account across the web, the policyholders would be granted a unique policy account number. Using the login ID given to them by their insurers, the policyholders can access using their password and access online endless number of insurance policies they may have bought.

Conclusion:- Environment sustainability is a major cause of concern these days. This explains the increasing urge to go digital, thus, ensuring less use of paper. Also, storing physical documents involves creating additional space while also paying for their security measures. Storing digitally prepared documents is a hassle-free process and involves no additional costs. The new mantra of IRDAI would pave the way for insurance companies guarantee security, albeit the digital way.