On 29 September 2022, The Insurance Regulatory Development Authority of India (IRDAI) released an exposure draft on dematerialisation of new insurance policies and requested all stakeholders to comment on the proposed regulations by October 20.
With the exposure draft, IRDA aims “To promote efficiency in the conduct of insurance business by enabling the insurers to establish an appropriate framework by adopting technology to build capabilities a) for solicitation of insurance business through electronic platform; b) to issue e-insurance policies procured either through electronic platform or otherwise; c) to mandate the use of electronic insurance account for holding e-insurance policies.”
As per the draft, insurers shall issue insurance policies only in electronic form. However, customers have the option to buy an insurance policy either by submitting a physical proposal form or through an electronic platform.
Further, the electronic platform must provide a step-by-step process for each of its functions in Regional, Hindi and English languages to help policyholders and their beneficiaries.
IRDAI also noted that e-insurance accounts (eIA) are mandatory for all policyholders and all insurance policies issued to a policyholder must be held in his e-insurance account.
The Exposure Draft Also Announces:
1. Discount on e-insurance policies
If a policyholder purchases an insurance policy through the electronic platform (directly), then he will get a discount on premium rates.
2. Dematerialisation of existing insurance policies
Every existing policyholder must be provided with an e-insurance policy facility within 12 months from the effective date of this regulation.
3. Power of the Authority to issue clarifications etc.
The Chairperson of the Authority may issue clarifications, directions and guidelines in the form of circulars/guidelines to prevent the difficulties in application or interpretation of any provisions of these Regulations.
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