From January, you can handle your insurance needs with an insurance account number with more speed and convenience, thanks to a new initiative of the Insurance Regulatory and Development Authority (IRDA). The Authority is working on introducing insurance accounts for each and every buyer of insurance that would facilitate electronic issue and monitoring of both life and general insurance policies.
“At present, we are talking to NSDL and several other players to launch the system by first week of January,”a senior IRDA official told the media.
The modalities such as issuing account numbers to prospective insurance buyers and extending it to over 7 crore insurance policy-holders in the country, digital signatures are being firmed up, he added.
The proposed insurance account would be ‘customer-friendly’ as it could be operated in a similar fashion to the demat accounts.
The electronic issue of policies based on an account number would make buying travel or health insurance and even life insurance faster and simpler.
“Once assigned an account number, a policy-holder will have ready-proof even if his/her policy document is lost. More importantly transactions such as changing nominations can be done easily,” the official said.
From an insurer’s perspective, the administrative costs could be cut down and the data storage/access could be hassle-free.
“More importantly, implantation of Know Your Customer (KYC) norms and Anti- Money Laundering guidelines will be easy and transparent,” he added.
One of the focus areas for IRDA of late has been preventing money laundering and insurance transactions based on unaccounted/black money.
NEED FOR CLARITY
According to Dr P. Nandagopal, Chief Executive Officer of IndiaFirst Life Insurance Company, the demat form would be beneficial for both the policyholders and the insurance companies as it will reduce transaction costs.
“Customers can now have a single point of transaction for insurance. For companies, the advantages will be the reduction in costs on account of lesser paperwork and other administrative work,” he said.
The procedures, however, need to be sound and clear. “Regulatory changes are expected for direct online models. There are still some issues like mobile money transfer and digital signatures where there is not much clarity,” said Mr Joydeep Roy, Chief Executive, L&T General Insurance.
In most of the foreign countries, different types of policies such as motor, health, engineering and travel are sold online, he added.