Irdai allows one-time password for opening online insurance account

Regulator Irdai has permitted usage of OTP or one-time password for opening e-insurance account (eIA) as an alternative to an electronic signature.

As part of its ongoing effort to improve insurance penetration, the Insurance Regulatory and Development Authority of India (Irdai) has also permitted e-KYC facility offered by UIDAI which provides the unique Aadhaar numbers.

Irdai said as part of its developmental mandate and to reach out to the policyholders in a cost efficient manner it has taken number of steps, including insurance e-commerce, issuance of electronic insurance policies, and maintenance of electronic records.

Insurers and other stakeholders had approached the regulator seeking clarity on some of the issues related to guidelines.

"In order to facilitate opening of e-insurance account through online/electronic means, the authority permits validation by 'One Time Password for eIA opening as an alternative to e-signature," Irdai said while issuing clarifications on guidelines on insurance e-commerce and electronic issuance of insurance policies.

As per current practise, an e-signature of the e- insurance account (eIA) holder on the application form for opening the account is considered as a valid authentication.

It further said that insurers can perform the verification of the client through e-KYC authentication facility provided by UIDAI.

UIDAI provides biometric authentication of a person based on Aadhaar.

The insurance regulator further said that e-PAN facility offered by NSDL for compliance to the Know Your Customer (KYC) / Anti-Money Laundering (AML) has been done away with.

One time password (OTP) is generated by computer and sent on mobile phone/e-mail to authenticate a transaction.