Irda to come up with final norms on digitising insurance policies by December

Following a pilot project, the Insurance Regulatory and Development Authority (Irda) plans to come out with final guidelines on digitising insurance policies by December.

Under the pilot, Irda had asked insurers to tie-up with all repositories so that policyholders can keep their policies in digital form. The project was implemented for two months from July 1. At the pilot stage, each life insurer had to convert at least 1,000 or 5% of existing individual policies, whichever is less, into electronic form. For new polices also, each life insurer had to issue at least 1,000 or 5% policies issued during the launch, whichever is less, in electronic form.

SV Ramanan, chief executive officer, CAMS Repository Services, says, "We have digitised one lakh policies so far but around 75% converted policies are existing ones. We have observed that agents are not very keen on issuing new policies in digital form as they do not get to see the policy documents. The digital copy goes directly to the policyholder. We have asked the regulator to look into the matter."

"Only a few companies have achieved the target of 2,000 policies, and it was mostly from existing policies. Many companies have even failed to comply with the project guidelines," he says.
Irda Chairman T S Vijayan says, "Initially the response was not very strong. That's why we asked insurance companies to do pilots. We wanted insurers to know the bottlenecks. Final guidelines are about to come but we may not make it mandatory for policyholders."

Irda has licensed five companies to act as repositories-NSDL Database Management, Central Insurance Repository, SHCIL Projects, Karvy Insurance Repository and CAMS Repository Services.

Experts say they have been talking with the regulator to make the whole process online so that policyholders do not have to go to the branch office for converting their policies. At present, one can convert by submitting the form directly to an insurance repository or by sending it through the insurance company. A unique number is assigned to every policyholder and details such as claim history and nominees are stored under that number.