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Repositories will facilitate holding of all types of life and non-life policies in a single electronic account in demat form

Last year, the insurance regulator Insurance Regulatory Development Authority(Irda) cleared the setting up of an insurance repository for storage and consolidation of multiple policy documents.

An insurance repository is a central database wherein every insured person can have easy access to the details of his/her insurance policies and can request various services on such policies. Individuals can hold all the insurance policies in electronic (demat) format in a single account by opening an electronic insurance account (eIA). Globally, this is the first of its kind.

Insurance repository is aimed at policy servicing, for ease of handling policy details at a single location in a digitised format, like shares of several companies in a demat account. One-time KYC compliance will facilitate hassle-free & timely issuance of fresh policies in the existing eIA.

All policies will be consolidated in a single eIA, irrespective of whether they are life or general. The service provided by the insurance repository will be absolutely free of cost. The charges applicable will be worn by the respective insurance companies.

The insurance regulator has authorised five national-level financial database management companies to provide insurance repository services to policy holders of all Irda licensed insurance companies.

Insurance repository services are presently being offered by National Insurance Repository (NIR) by NSDL Database Management Services (NDML), Central Insurance Repository (CIRL) by Central Depository Services, SHCIL Projects by Stock Holding Corporation of India, CAMS Repository Services and Karvy Insurance Repository.

Insurance repositories will facilitate holding of all type of insurance policies in electronic form in a single electronic insurance account (eIA). When it started in September-October last year, it included only life insurance policies.

The KYC done while opening an eIA will eliminate the need to repeatedly do the KYC every time an insurance policy is purchased. Electronic insurance account will also act as a single point of contact for the account- holder to update demographic details such as change in mailing address with all the insurance companies with whom insurance policies are held. It will also facilitate conversion of the existing paper policies and their consolidation into electronic policies at the request of the policyholders.

Insurance repository will also ease claim settlement with single view of all policies to an authorised person in case of death of the account holder and one-time claim intimation.

Individuals will have option to appoint an authorised representative (AR) at the time of opening the account or later. On demise or incapability of the account holder, AR will intimate the same to the insurance repository and thereupon access the eIA to settle claims as per policy level nomination(s) or as the case may be.

Electronic individual account will eradicate multiple communications to various insurers for updates/service requests.

From the policy holder’s point, of view at a click of a button, an individual can view his account to monitor regular updates on premium payment date, dividend/ moneyback dates and policy expiry date sent to them.

Web portal of the insurance repository will also help in making online premium payment seamlessly, thus it will mitigate policy lapses due to timely alerts.

The account opening with one of the five insurance repositories involves simple documentation & an easy-to-fill account opening form with requirements like a recent photo, documents to support proof of identity like PAN or Aadhar card and self-attested photocopies of address proof.

A policy conversion form is to be submitted with details of the policy mentioned in the physical document.

Insurance Repository captures KYC data, converts the policies into electronic mode, protects them and takes care of your ongoing servicing needs of policy holders. All you need to do is to open one e-Insurance Account and tag all your insurance policies to this account.

Insurance repositories provide convenience during policy purchase, convenience in policy maintenance as well as in applying for loans against the policy. Once the physical policies are consolidated in an electronic insurance account, the physical policies will become null & void.

Talking about how the account will also facilitate in availing loan against policies Vaibhav K, customer associate, Karvy Insurance Repository said, “There will be option for loan in the individual account’s ‘My Portfolio’ section with option to select specific policy on which loan is to be taken. Afund statement will be then generated and loan translator will tell us how much loan is possible.”

“Modus operandi for loans to be taken from other agencies like banks, NBFCs and brokerages against a life insurance policy is still in the process of being finalised,” Vaibhav K said.

Most of the private insurance companies have tied up with the insurance repositories while public sector insurance major Life Insurance Corporation of India has not tied up with any of the five designated repositories so far. “Eight insurance companies have enrolled with Karvy and another eight are in the pipeline,” Vaibhav K said.

The initial response from the policyholders has been good with around 30,000 individual accounts opened, especially from ICICI Prudential and Reliance Life Insurance.

However, according to a LIC official, it was still at an early stage with hardly any activity. Insurance repositories appointed by Irda are neutral entities who are not supposed to have conflict of interest with insurers or agents, and also ensure protection of customer data confidentiality.

raviranjan@mydigitalfc.com

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