IRDAI has allowed insurers and intermediaries to issue policies online. Know how the process will work
Soon, you will be able to buy a fresh life or general insurance policy completely online, without having to step out of your house or meet an intermediary physically to hand over signed identity documents.
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The Insurance Regulatory and Development Authority of India (IRDAI) has permitted insurance companies to issue policies on the basis of a video KYC (know-your-customer) process. had first reported the regulator’s plan of allowing insurers to adopt video-based KYC for policy issuance. It has already allowed insurers to use digital modes for validating policyholders’ signatures on documents.
Earlier, the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI), too, had allowed entities such as banks and mutual funds to use video-based tools to complete the mandatory KYC process. The Pension Fund Regulatory and Development Authority (PFRDA) has also permitted distributors to use video KYC for onboarding National Pension System (NPS) subscribers.
Let’s understand IRDAI’s latest move and what it means for policyholders.
In these COVID-19 times, you will not have to risk visiting an insurance company’s branch or agent’s office to complete the policy purchase process, including KYC verification. Insurers are yet to roll out the process. Once they do, it is likely that you will have to access the insurer’s platform via a link or app shared by the company. You will have to answer questions via a video instead of doing so physically, besides sharing KYC documents online to complete the process. “The questions could be dynamic. Since one of the purposes is to establish that the person is alive, questions could be devised in such a way that responses cannot be standard,” says Vaidyanathan.
While the onus of executing a secure transaction is on the insurer, on your part, ensure that you are dealing with authorised representatives of the company and the video is being recorded through company-authorised channels.
Will policyholders have to incur any cost to complete the process?
There is no additional cost for the video KYC verification process. “For insurers, however, virtual KYC will bring down the overall costs that the process otherwise entails,” says Vaidyanathan.
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