A month down the line, you may be holding insurance policies in electronic form. According to sector experts, the regulator is in the last lap of checking repositories' preparedness and infrastructure, and is likely to allot licences by May-end or early June. Though e-policies will be available across life, health and motor insurance segments, the service will first start for life covers.
Experts say companies, such as ICICI Prudential Life Insurance and Birla SunLife Insurance are ready to launch. “Five to 10 insurance companies are ready for issuing e-insurance,” says an industry official. “The rest may start by September.”
The industry initially expects customer traction to be low. It sees two to five per cent of the new business premium in the electronic form in the first year of e-policy. This may increase to 10 to 15 per cent in the second year. “Policyholders will understand the ease of owning an e-policy and gravitate towards it once they own one,” feels K R Chandrasekaran, head (insurance and banking), CAMS, an insurance repository with NSDL, CDSL and Stockholding Corp. Insurance repositories, like share depositories or mutual fund transfer agencies, will hold e-policy records.
If you buy an e-policy and do not want to continue with it, you can convert it to paper, and vice versa, too.
How to buy an e-policy?
You can approach an insurer and ask it to issue an e-policy in your name, explains Chandrasekaran. The company will inform the repository, which, in turn, will call you and complete the know your customer (KYC) norms for an e-insurance account (e-IA). Once the policy is issued, the insurer will share the details with the repository, who, in turn, will update it in your account. Then, you will be given a receipt with your transaction summary. Or, you open an e-IA and then buy a policy either online or offline. The repository service will be free of cost; the insurer will pay them. You will need your identity and address proof for KYC.
For policy conversion, you can open an account and send the policy conversion request and policy document alongwith the repository. Each e-IA will get a login ID and password to access one’s account and electronic policy details online on the repository’s website.
Convenience, mainly. You can hold multiple policies in a single e-IA. You can access any of your policies at any time by logging on to the repository site. And, pay premium(s) online.
Also, a single KYC window means less paper work. If you want to make changes to your personal details, you cam change it in your e-IA with one request. The repository will inform all the companies with whom you hold electronic policies.
All policies can be serviced just by providing your e-IA by placing a request to your repository instead of visiting different insurers.