The Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory to have an e-insurance account for policies purchased after October 1.
IRDAI had introduced e-insurance accounts two years ago, but has made it compulsory only recently.
The move will help not only in consolidating portfolios, but also reduce multi-step procedures and make payment and claims easier, SV Ramanan, CEO of CAMS Repository Services told Moneycontrol.
The e-insurance account will provide a single point of access to policyholders. In one account, holders can store multiple policies issued by different insurers.
The existing physical policies can be converted into e-copies by the policy holder. The electronic copies will be considered originals by the authorities.
Ramanan says that nearly maturity claims of Rs 5,000 crore go unnoticed. The new system will regulate the entire cycle.
As per the rules, each account will have a unique identification number and password to access also e-documents.
Not only the documents are secured in one place, it simplifies the Know Your Customer (KYC) process, making changes in existing and new policies.
Another benefit is that customers will no longer have to go to insurance offices to get the work done.
The holder will have to do the KYC only once and not repeatedly for all insurances that he/she takes. The new system will provide high access to policy holders for low data charges.
In areas where digital reach is low, the insurance companies have nearly 1,25,000 common service centres for every six villages that will help people in setting up e-insurance accounts.
On the issue of increasing cyberfrauds, Ramanan said that the electronic infrastructure is strong enough to prevent such frauds. So far, seven lakh people have registered for the online facility and nearly 5 lakh policies have been converted.
The government’s digital lockers, which are also issued by some private entities like ICICI Bank, are similar to e-insurance accounts.
The difference is that in a digital locker, the holder can save multiple documents including insurance papers. On the other hand, IRDAI’s e-insurance account is exclusively for storing e-insurance documents.