You will soon be required to provide Know Your Customer (KYC) documents when purchasing a health and auto insurance policy. Indeed, the Insurance Regulatory and Development Authority of India (IRDAI) plans to make KYC information mandatory for general insurance companies. Currently, the KYC requirement is voluntary at the time of non-life policy purchase. However, KYC documents such as proof of identity and proof of address are mandatory for making health insurance claims, especially if the claim amount is Rs1 lakh and above.
Insurance experts claim that making KYC mandatory will help them build a detailed database of customers which, in turn, will prove beneficial when settling claims.
“Making KYC mandatory for health and car insurance policies will help insurance companies create customer profiles that will prove beneficial in the long run for all stakeholders. Early-stage KYC will also help policyholders because it will lead to faster claims settlement, however, this additional requirement will lead to minor friction during customer onboarding,” says Anup Rau, Managing Director and Managing Director of Future Generali India Insurance Company.
According to sources, the regulator plans to make it mandatory from November 1, but the industry has asked for an extension to implement it.
Recently, IRDAI enabled all insurers including life and non-life to offer insurance plans via video identification procedure, which helped to fulfill KYC requirements online due to the pandemic situation. A KYC video helped them verify if the policy is issued to the real person to avoid any cases of fraud at a later stage.
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