IRDAI Looks at New Rules for e-Insurance

The Insurance Regulatory and Development Authority of India (IRDAI) is looking at two-factor authentication for e-insurance policies. Currently, insurers let customers buy motor and personal accident policies with single-factor authentication.

The regulator recommends that insurers issue One Time Passwords (OTPs) in addition to digital and electronic signatures and said it is looking at amending existing regulation. IRDAI is aiming at making the process of online sales more credible and reduce instances of fraud with these changes. "Currently there are two methods of buying online. The first is when the customer creates an e-insurance account and buys policies online; the policies are then stored digitally. In the second instance, when customers don't have an account, they can still open a policy, but the insurer has to send hard copies to policyholders.

Now, where the regulator wants to increase security is by requiring digital signatures over e-signatures," says Puneet Sahni, head product development, SBI General Insurance Co. E-signatures, which are widely used, allow customers to sign documents online with a click of the mouse or by using their fingers to trace a handwritten signature. A digital signature, however, is more secure than a e-signature - as it links a "fingerprint" or iris-biometric of the document to your identity.