All existing and new insurance policies will now be in a dematerialised format and held with an insurance repository. The repositories will enable policyholders to make changes in nominee or address details, or make any other modification, and also act as a single-stop shop for all policy-related servicing.
In 2011, the Insurance Regulatory and Development Authority (Irda) came out with guidelines to form an insurance repository on the lines of the National Securities Depository or the Central Securities Depository. Irda granted certificate of registration for repositories to five entities — NSDL Database Management, Central Insurance Repository, SHCIL Projects, Karvy Insurance Repository and CAMS Repository Services.
Last week, finance minister P Chidambaram inaugurated the insurance repositories system for individual policyholders as part of efforts to improve services and expand insurance reach.
One of the major advantages of keeping insurance policies in electronic form is safety as there is no risk of loss or damage. Since all insurance policies can be electronically held under a single e-insurance account, the policyholder can access the policy and get details from anywhere and even download a copy of the policy.
A single change-of-address request made to the insurance repository can update policies issued by multiple insurers, thus reducing paperwork.
Moreover, an e-insurance accountholder will be spared the trouble of submitting KYC details each time a new policy is taken. Every year, the repository will send a statement of account to the e-insurance accountholder with the details of the policies. Single view of all policies will be made available to an authorised person in case of death of the e-insurance accountholder, which will help in faster claim settlement.
At present, the management cost for insurance companies is around R120 per policy per annum. With e-insurance, the cost is likely to come down to R20 per policy per annum. The e-insurance account and servicing will be offered without any charges to the policyholder.
While, eventually, all new and existing life, annuities, health and general insurance policies can be credited to the e-account, only the life insurance policies will be credited to start with.
Insurance firms will send an insurance information sheet, which will contain basic details of the policy when a new electronic policy is issued. Repositories will enable a platform where policyholders can get the facility of online payment of premiums and online claim settlement by insurers. The e-insurance account holder will have an option to shift