Irdai offers new insurance policies in “demat format” from December

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With dematerialization, an insured can constitute a portfolio of insurance contracts available to him and store them in electronic form with an insurance repository. With this rule, policyholders can only have one “e-Insurance Account” (eIA) with an insurance repository of their choice.

In a bid to move towards the digitization of insurance policies, the Insurance Regulatory and Development Authority of India (Irdai) has proposed to impose the dematerialization of new policies from December this year.
The dematerialization of insurance policies will make it possible to transform physical documents into an editable format online.
With dematerialization, an insured can constitute a portfolio of insurance contracts available to him and store them in electronic form with an insurance repository. With this rule, policyholders can only have one “electronic insurance account” (eIA) with an insurance repository of their choice, according to a report.

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IRDAI is said to have launched the dematerialization initiative a few years ago, but it has not taken off due to operational difficulties. Today, the insurance regulator is pushing the idea of ​​ensuring a robust electronic mode of policy solicitation, management and storage.

From November, eKYC will also become mandatory for all insurance policies, which will further contribute to the dematerialization of insurance policies. IRDAI has also proposed the establishment of a new platform for the sale, management and claims of insurance policies, which will be operational from this month of December.

In recent years, insurance repositories have been set up with the aim of opening an eIA, which can be a repository of all insurance policies of a client.

Currently, there are four insurance repositories – NSDL National Insurance Repository, CDSL Insurance Repository, Karvy Insurance Repository and CAMS Insurance Repository Services.

The insurance repository maintains the EIA of the insured person and all insurance policies (life/non-life/group) can be stored and accessed through this facility.

Industry experts believe that policy dematerialization is a good move that will bring the benefits of automation and digitalization to the industry and help customers access insurance services in an easy way.

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