Tie-up With Repositories for E-Insurance Optional

Repositories are likely to see slow business in the initial phases of digitisation of insurance policies, which will become mandatory above a threshold from October 1. Now, insurance companies will not be required to tie up with repositories to issue e-insurance. Earlier, the Insurance Regulatory and Development Authority of India (Irdai) had said insurers would have to tie up with repositories to offer digitised policies.

An insurance repository is a facility to help policy holders buy and keep policies in electronic format, rather than in physical documents.The sector has five registered repositories - Karvy Insurance Repository, Central Insurance Repository, CAMS Repository Service, NSDL Database Management and SHCIL Projects.In its e-insurance policies regulations, Irdai said electronic insurance would become mandatory for annual premiums equal to or above Rs 10,000 in life insurance policies.
 

"It was earlier anticipated that insurers would have to tie up with repositories but, now it has been made optional. Business for repositories will be slow in the initial phases, till a large volume of policies are digitised," said a repository executive.Less than two per cent of insurance policies sold in the country are in electronic format. India First Insurance launched the first digitised policy in September 2013. According to Irdai estimates, insurance companies spend Rs 150-200 per customer every year to maintain policy documents. The digital initiative is expected to save at least Rs 100 crore a year.

Life Insurance Corporation of India, the country's largest, has launched its own platform for e-services which will offer a multiple services, including electronic policies. It has decided not to tie-up with an external repository.
 

Irdai has asked insurers to create an e-proposal form, similar to the physical proposal , which will have a provision to capture the electronic insurance account number.Repositories will maintain records of the accounts, policies issued, an index of policy holders and their nominees. They will also maintain a history of claim data. All e-policies issued by insurers to policy holders will also be issued in physical form. Physical policies need not be issued if done through repositories.In general insurance, all retail policies, except motor, individual personal accident and domestic travel with annual premium above Rs 5,000 will have to be issued in electronic format. For motor, retail and individual foreign travel insurance, policies will be issued in electronic format.