E-insurance may soon be a must for high-value life insurance policies

MUMBAI: Soon, you will have to get used to electronic insurance policies, if the Insurance Regulatory and Development Authority of India ( Irdai) has its way. “Irdai has circulated a draft amongst stakeholders, which mandates issuance of policies in an electronic form above a certain threshold limit, besides enhancing the process and system interaction between an insurance company and an insurance repository,” said a senior executive of an insurance repository.

The insurance regulator has proposed to make it mandatory for insurers to issue all new life insurance policies with annual premium of over Rs 50, 000 in electronic form. Insurers will have to seek policyholders’ consent while issuing the electronic policy.

“Policyholders will retain the right to ask for a physical policy, but at the time of issuing every policy, insurers will have to specifically enquire whether they would like to exercise the option of receiving it in the dematerialised form,” said SV Ramanan, CEO, CAMS Insurance Repository.

Moreover, even if the policyholder insists on a physical policy, the insurer will have to issue it in the electronic form as well. This move will ensure that all new high-value life insurance policies will be available in the electronic form, too, irrespective of whether the policyholder chooses the option or not.\

The new rule will also apply to new motor and health insurance policies entailing a premium of more than Rs 10, 000. Likewise, group life and health insurance policies provided by organisations employing over 50 employees will have to be issued in an electronic form.

The insurance regulator has authorised five entities — NSDL, Central Insurance Repository, CAMS Insurance Repository, Stock holding Corporation of India (SCHIL) and Karvy Insurance Repository — to dematerialise physical policies. At present, the facility is available only for life insurance policies.