LEARNING WITH THE TIMES How to demat insurance policies

With the Insurance Regulatory and Development Authority (IRDA) set to issue final certificate of registration to five entities, policyholders have the option of maintaining policies in demat form, similar to how equity shares can be maintained in depositories. A look at how the new system will work.  What is an insurance  repository?  An insurance repository is a company recognized by the insurance regulator for maintaining a data of insurance policies (life, health, motor and group covers ) in electronic form on the behalf of insurers, including the history of transactions during the term of policy. They are similar to depositories that hold equity shares in demat form. IRDA has approved five repositories promoted by NSDL, CDSL, SHCIL, Cams and Karvy for setting up insurance repositories and has indicated that final certificate of registration would soon be granted.  Why have a repository?  The objective is to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies. Also, policyholders will not be required to go through KYC procedure every time when they buy insurance cover. Since the repository will consolidate all policies under a single account, the family will immediately come to know of the policies purchased by an individual in an emergency. This development will definitely boost the web assurance/internet Insurance market in India. With such infrastructure in place, authentication of the insured and even the insurability can be verified easily by insurers, and consumers can have easier and faster process in purchasing the policies online.  What is an electronic insurance account and who can open it?  An eIA account (electronic insurance account) is the portfolio of insurance policies of a policyholder held in electronic form with an insurance repository. Anyone — existing policyholders or prospective ones — can open an e-insurance account. There is no additional cost for opting for electronic policies. Existing policies can also be dematerialized. A policy holder can avail the benefits of services like financial or non-financial alteration/endorsements under the single e-insurance account. The account can be opened by filling a form and submitting the KYC documents at any insurance repository branch or at the insurance company where the policyholder has his life or non-life insurance policy or the authorized approved person appointed by the insurance repository.  Who bears the cost?  The eIA opening is free of cost wherein all the incidental expenses will be borne by the insurance repository. Policy creation, dematerialization and servicing thereafter would be paid by the respective insurers on behalf of their policyholders.  What is the basic requirement to be completed for  opening an eIA account?  An eIA form needs to filled up and submitted along with photo ID and address proof to any nearest office of insurance repository branch or to the insurance company where the policyholder has his life or non-life insurance policy or the authorized approved person (AP) appointed by the insurance repository.