IRDAI makes it mandatory for dematerialisation of insurance policies
- IBJ Bureau
- Sep 10, 2022
The Insurance Regulatory and Development Authority of India (IRDAI) has proposed to mandate dematerialisation of all new insurance policies by December this year in a bid to digitalise insurance policies. Dematerialisation refers to transforming physical documents into a modifiable online format.
With dematerialisation or demat, a policyholder can create a portfolio of insurance policies he has and store them in an electronic form with an insurance repository. With this rule, policyholders can have only one e-Insurance Account’ (eIA) with an insurance repository of their choice, according to a news report.
The IRDAI had reportedly started the demat initiative a few years ago, but it did not take off due to operational challenges. Now, the insurance regulator is pushing the idea to ensure a robust electronic mode of policy solicitation, servicing, and storage. From November 1, eKYC will also become mandatory for all insurance policies, which will further help in dematerialising insurance policies.
The IRDAI has also proposed setting up a new platform for sale, servicing and claims of insurance policies, which will be operational from this December.
In the last few years, insurance repositories were set up with the aim of opening an eIA, which can be a repository of all insurance policies of a customer.
At present, there are four insurance repositories – NSDL National Insurance Repository, CDSL Insurance Repository, Karvy Insurance Repository and CAMS Insurance Repository Services.