You can now store all your policies electronically under a single electronic insurance account
Deepti Bhaskaran | First Published: Mon, Sep 16 2013. 04 53 PM IST | Live Mint

Finance minister P. Chidambaram on Monday launched the insurance repository system (IRS) of the Insurance Regulatory and Development Authority, or Irda.

With this, you will now enjoy the comfort of storing all your policies electronically under a single electronic insurance account or e-Insurance account, just like you hold your stock certificates and mutual fund units online in dematerialized form.

Irda has registered five companies so far to act as insurance repositories—NSDL Database Management Ltd, Central Insurance Repository Ltd, SHCIL Projects Ltd, Karvy Insurance Repository Ltd and CAMS Repository Services Ltd. These companies, will be linked to all insurance companies, will maintain data of policies electronically for insurers and will open e-Insurance accounts for policyholders.

To store all your policies online, you will have to create an e-Insurance account with a repository free of cost either directly or through an insurer.

While creating an account, you have to provide relevant information such as address and identity proofs. “An added benefit of having an e-Insurance account would be that insurers will not insist on KYC (know your customer) every time you buy insurance. They will be able to get your KYC details from us. Plus, if you change, say, your address, you just need to register that change with us and we will update that for all your policies,” says Viiveck Verma, executive director, Karvy Insurance Repository.

Karvy closed its insurance broking business to become a repository as soliciting and servicing policies at the same time is considered as conflict of interest.

Once you have an e-Insurance account, you will have an account number, username and password. When you buy a policy, you need to quote your e-Insurance account number and request for dematerialization when you fill up the proposal form. This also applies when purchasing insurance online. You can also dematerialize existing policies by sending a request to your insurer or the repository.

Benefits
The biggest benefit of holding all your policies electronically is that there’s no risk of losing physical documents. Besides, it’s easier for nominees to track insurance details.

The account will allow you to hold all insurance policies—life, health, car and others—at one place. You can’t open multiple accounts. Initially, you will be able to dematerialize only life insurance policies.

“Life insurance is long term, so the need to dematerialize them is more. Non-life policies, on the other hand, are one-year policies, also holding all non-life policies electronically may not be feasible. For instance, you will need to have physical documents of your car insurance policy to show the traffic police. The timeline on non-life policies is yet to be announced,” says K.G. Krishnamoorthy Rao, managing director and chief executive of Future Generali India Insurance Co. Ltd.

You can also pay premium or send service requests such as switching investment funds in an equities-linked insurance plan with your e-Insurance account.

To be sure, storing policy details online is different from buying a policy online. Even when you buy a policy online, you get a policy in a physical form. But, with your e-Insurance account, you will be able to hold this policy bond electronically online.

Can you demat right now?
Although you can open an e-Insurance account right away, dematerializing policies will take some more time.

“There is still some work to be done. Backend integration of systems need to be complete and insurance repositories have to go online themselves. So far one-two out of five are online. Also, customer awareness is minimal in this area. All this will take some time,” says Yateesh Srivastava, chief operating officer, Aegon Religare Life Insurance Co. Ltd, which is in talks with repository firms.

“An individual can open an e-Insurance account with us right away, but he will be able to hold policies electronically only once we have a tie-up with the insurance company. Only tie-ups are not enough—their systems have to be ready too. While tie-ups are expected to take place over the next few weeks, systems may take some months to get ready,” says Karvy’s Verma.

The way is thus marked for the industry to move to the digital space. For you, this means great comfort. For insurers, it means saving on costs.

Source : http://goo.gl/VKLjuR