As the 1st October deadline for issuing electronic policies is fast approaching, insurance companies and repositories are preparing for all life and motor retail policyholders who pay ₹10,000 or more premium annually to receive policies in the electronic format.
The Insurance Regulatory and Development Authority of India (IRDAI) had mentioned that the norms would be effective from 1st October 2016 in Issuance of e-Insurance Policies Regulations 2016.
Policyholders will have an e-insurance account and e-version of their policies. Electronic policies issued and digitally signed by the insurance company are considered documentary evidence of the agreement of insurance between the policyholder and company.
In the general insurance category, for all retail policies and individual personal accident and domestic travel policies, an annual premium of ₹5,000 will be the threshold for e-policy issuance. In case of motor retail and individual overseas travel insurance, all policies are to be issued in e-format.
The IRDAI expects customer adaptability to be fast even though overall traction is low at the initial stages. It has also asked every insurer to create an e-proposal form approved by the authority, similar to their physical proposal.
According to IRDAI’s estimation, insurance firms spend ₹150-200 per customer annually to keep policies in the physical form, with only 1-1.5% policies issued in e-format.The e-forms would enable easy processing and servicing and would facilitate capturing the electronic insurance account number.