Benefits of managing digital policy under various scenarios

To promote the digitisation initiative in insurance, aligned to the Digital India initiative of the government, IRDAI (Insurance Regulatory and Development Authority of India) has released the final regulations that mandate insurance policies above a certain annual premium (Rs 10,000 in case of life and health, and Rs 5,000 for general insurance and all motor insurance) has to be mandatorily issued in electronic form. This will come into effect from October 1, 2016, and can increase the penetration of insurance repositories, and in turn benefit the policyholder.

Though internet banking has been available for many years, the advent of mobile wallets has made people more comfortable with transacting. From booking cabs, to booking movie tickets and even to buying groceries, it is all done using mobile phone apps.

In the financial services industry, shareholding has been dematerialised, and products such as the National Pension System and mutual funds are available electronically. And many private banks will now charge if you want to visit their branches for transactions.
The IRDAI introduced the insurance repository in 2013—a first of its kind initiative in the world.

Here are some of the benefits of holding insurance:

Safety: There is no risk of loss or damage of a policy; the electronic form ensures that they are in safe custody and can be easily accessed when needed.

Convenience and single point of service: All insurance policies, be it life, pension, health or general, can be electronically held under a single e-insurance account. Premium for all the policies can be paid online and service requests or complaints can be registered at the website of the Insurance Repository.

Less paper work: When you want to buy a new electronic policy under an existing e-insurance account, you do not need to go through the KYC verification process again. Further, if you want to make any changes to your personal details like address or contact details, you just need to change the details in your e-insurance account with the repository by submitting a single request.

The repository will then inform all the insurance companies with whom you hold electronic policies, about the changes. Such service request which pertains to the e-insurance account is executed by the repository, and the information is then passed on to the insurer. Whereas, service requests with regards to insurance policies, loans, change in nomination details and so on, the repository will coordinate with the insurer for its execution, after which it will be communicated to the policyholder.

An e-insurance account can be operated by the account holder only during her life time, unless she has been rendered incapable to operating it. In such circumstances, the account can be operated by an authorised representative (AR) appointed by the account holder.

A policyholder who opens an e-insurance account has to appoint an AR who will be entitled to access it in the event of demise of the policyholder or in her incapacity to operate the account. The policyholder can change the AR, at her discretion, during the term of the insurance account.

E Insurance Account is free of charge to the policyholder. The repository will be paid directly by the insurance companies whose policies are held in electronic form so that no charges are levied on policyholders. Insurance companies will be able to pay repository for the services rendered out of the savings that will accrue to them by shifting to electronic policies.

(The writer is CEO at CAMS Insurance Repository Services)