Repository formed to digitise insurance

 In a move to dematerialise insurance policies and store them in electronic form, Union Finance Minister P Chidambaram, launched, Insurance Regulatory and Development Authority (IRDA)’s Insurance Repository System here on Monday.

The finance minister wanted the IRDA to extend the insurance repository system to non-life insurance policies soon. “During natural calamities such as the recent floods in Uttarakhand, people lose their insurance policies making claim and settlement of insurance almost impossible. Loss of identity in case of migration also affects claim and settlement of policies. Hence we require mandatory digitisation of life and non-life insurances in the country,” Chidambaram said.

He added that the digitation process also cuts down cost of maintaining insurance policies. “At present the insuring agencies have to spend Rs 150 per account per year, whereas managing an e-policy will be as cheap as Rs 20 per policy. And there will be no threat of forgery as there will be one account for multiple polices held by the policy holder,” he explained.

Speaking at the launch IRDA Chairman TS Vijayan described the new system as a part of IRDA’s efforts to improve services to policy holders and increase penetration. “The percentage of insurance penetration is 3.96 per cent compared to that of world average of 6.5 per cent in 2012,” Vijayan said.

According to IRDA, five companies have been given the status of insurance repositories and provided with a license that will be valid till July 31, 2014. The five companies are: NSDL Database Management Limited, Central Insurance Repository Limited, SHCIL Projects Limited, CAMS Repository Services Limited and Karvy Insurance Repository Limited.

The repository will issue a unique code number to all policy holders, and their policies will come under that number. It maintains the history of the policy details such as claims, nominees, beneficiaries and other data.

A policy holder needs to open an e –insurance account (eIA) with an insurance repository to be able to buy and keep policies issued by various insurers in electronic mode, be it life, pension, health or general. An individual can have only one eIA and will get a unique account number. Once an eIA is opened, a policy holder can keep all his e policies, life or non-life, issued by various insurers under the single account.