Life insurance policy holders may not be required to keep paper records of their policies once the plan for digitalisation of the sector that is being worked on by the Life Insurance Council is approved by the regulator IRDA.
Life Insurance Council is examining the issue and it is expected to be finalised within a month. If the proposal is approved by IRDA, it could make storage of life insurance related information in digital format possible.
“The proposal will be finalised in a month. We are examining the issue. The current system involves a lot of logistics,” S B Mathur, the council’s secretary general said. Demat, or digital format of storing information, will significantly save distribution costs for insurance companies.
Currently, two depositories — National Securities Depository Ltd (NSDL) and Central Depository Services (India) Ltd (CDSL) — collectively hold and manage accounts in the electronic form or demat accounts. The NSDL maintains over one crore demat account while more than 64 lakh accounts are managed by the other depository CDSL.
Currently there are 23 life insurance companies operating in the country with 29 crore policies in-force at the end of 2008-09. New policies underwritten by the life insurers were 5.09 crore in 2008-09 against 5.08 crore during 2007-08 showing a marginal increase of 0.10 per cent.
In the first three quarter of the current fiscal, over 3 crore life insurance policies had been sold with new business of life insurance companies growing around 30 per cent to Rs 67,557 crore. The industry had mopped up Rs 52,298 crore during the same period last fiscal.
