Reshaping the Indian Insurance Industry with Demat Format for New Policies
Starting 1st April 2024, a significant change is set to take place in the Indian insurance sector. The Insurance Regulatory and Development Authority of India (IRDAI) has announced that it will be mandatory for all insurance policies, including health, life, and general insurance, to be issued in electronic format. This move aims to ease the insurance process and enhance the convenience for policyholders.
A notification titled “Protection of Policyholders’ Interests, Operations, and Allied Matters of Insurers Regulations, 2024,” was released on March 20, 2024, in which IRDAI highlighted the transition of traditional insurance policies to electronic policies.
The regulator stated that regardless of how the proposal is received, insurers must issue insurance policies only in electronic form. To do so, insurance companies must meet two conditions:
- The authority may grant exemptions if it benefits policyholders and the insurance industry's growth, and
- Insurers must ask prospects if they want a physical policy document when filling out the proposal form.
E - insurance - What It Is?
As the name suggests, e-insurance involves purchasing any type of insurance coverage in digital format. These electronic insurance policies will be stored in a demat account known as the e-Insurance Account, or eIA.
With this change, policyholders can enjoy the convenience of managing all their insurance plans in one place. This will moreover eliminate the need for physical documentation and hassle when filing claims.
About E-insurance Accounts
Four insurance repositories i.e. the Central Insurance Repository of India, NSDL Database Management (NDML), Karvy, and CAMS Insurance Repository will make it easier for you to open e-Insurance accounts. These repositories will allow policyholders to save and manage their electronic insurance policies safely.
In addition to this, an electronic insurance account facilitates bidirectional contact between policyholders and insurers.
Through the eIA, policyholders can change their details, including address and phone number, guaranteeing that insurers have the most up-to-date information. Similarly, by using the same eIA, insurance companies can notify policyholders immediately of any updates or modifications. This will altogether expedite the insurance policy management process.
Opening E-insurance Account
Opening an e-Insurance Account is a hassle-free process and comes at no cost to you. When you are in the process of purchasing a new insurance policy, you will have the opportunity to specify where you would like to open your e-Insurance Account. The insurer will then be responsible for opening the account for you once you provide the necessary KYC documents like proof of identity, address, and any other relevant information required by the repository.
Alternatively, you can directly approach the insurance repositories to open your e-Insurance Account. They will guide you through the process and assist you in getting everything done smoothly.
Please note that opening an e-insurance account is free of cost and your insurance provider will cover all expenses related to the account.
Conclusion
Previously, policyholders had to maintain separate records for each insurance policy which leads to confusion and inefficiency most of the time. But, now with e-insurance, all policy documents will be consolidated in the e-insurance Account, making it easier for you to access and manage insurance policies. This shift towards e-insurance indicates a move towards digitalisation in the insurance sector, which is actually a need in today’s rapidly changing world.
