INSURANCE POLICIES TO GO PAPERLESS

By the end of this year, all new insurance policies are likely to be available in demat form

- Narayan Krishnamurthy

The Insurance Regulatory and Development Authority of India (IRDAI) is exploring ways to make it mandatory for all new insurance policies issued from December 2022 to be in dematerialized form. While insurers and other stakeholders are mulling the decision, insurance in demat form is not new. In 2013, the concept of insurance policies in demat format was introduced with repositories such as CAMS Repository, Karvy, NSDL Database Management Limited (NDML), and the Central Insurance Repository of India setting up operations to facilitate the opening of e-insurance accounts (eIA).

However, unlike the demat form of stock holdings, which took off when it was made compulsory and earned wide acceptance, insurance repositories (IR) haven't met with the same degree of success. In fact, there were five repositories originally, including SHCIL Projects, which subsequently gave up its licence due to the tepid response. As policyholders had the option to hold the policy in physical or digital form, they chose to opt for the former, with intermediaries and insurers too not in favour of policyholders keeping their policies in a digital form due to the cost involved per policy for the insurer each time policyholders expressed a desire to hold their policy in demat form. These are costs that have been agreed upon between IRs and insurers for each transaction type and which can vary based on transaction volume.

SHOW AN INSURANCE REPOSITORY WORKS