The Insurance Regulatory and Development Authority of India
(Irdai) has asked all the insurance companies to mandatory link Aadhaar with every individual policy. This move might have some short-term logistical challenge but there would be long-term benefits for the insurance industry.
Irdai, in its circular on Wednesday said, “The Authority clarifies that, linkage of Aadhaar number to insurance Policies is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017.” This moves comes after Central Government vide gazette notification dated 1st June 2017 notified the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 making Aadhaar and PAN/Form 60 mandatory for availing financial services including insurance and also for linking the existing policies with the same.
Senior officials in the insurance industry feel that, for initial some time there might be some problems in linking the Aadhaar, but there are long term benefits in terms of preventing frauds and streamlining KYC process. Antony Jacob, Chief Executive Officer, Apollo Munich Health Insurance said, “IRDAI's move to make linking of Aadhar with insurance policies mandatory is a welcome positive announcement. This is in sync with government’s mission of digitisation. We believe that this new mandate will further help in streamlining KYC processes for customers and shall prevent fraudulent claims. We are positive that such initiative will further make the claim process faster and ensure better customer experience. There might be some short term inconvenience in the beginning but this is a sure shot win-win in the long term.”
also added that, these rules have statutory force and, as such, Life and General Insurers (including Standalone Health insurers) have to implement them without awaiting further instructions. “I think for the initial time we would find it very difficult to complete the procedure on time as we assume that the process needs to be completed by December end. There will be logistical challenge, but as of now it looks difficult to complete entire exercise on time,” said a CEO from the private insurance company.