The Insurance Regulatory and Development Authority (IRDA) of India will launch a pilot on life insurance repository (IR) system, as it gears to digitalization of life insurance industry in the country.
The pilot program, which is compulsory for all life insurers and five insurance repositories, aims to keep a policy in digitized/de-materialized form to be able to access as per requirements.
According to IRDA, the two-month pilot would start on 1 July 2014, and each life insurer would have to convert a minimum of 1,000 or 5% of the individual policies.
Irda has said during the pilot launch, an insurer will not deny any request for electronic policy — both for conversion of policies and for issuance of new ones from any of the policyholders. Five companies have been given licences to become IRs.
An insurance repository (IR) is a facility, where policyholders purchase and keep insurance policies in electronic form, instead of keeping them in a paper document.
These repositories will manage electronic records of insurance policies issued to individuals and such policies are known as electronic policies or e-policies.
The insurance regulator had granted certificates of registration to five entities to act as insurance repositories in July 2013.
The IR would be responsible for offering mandatory information such as policy status including premium status, NAV status, bonus status, loan status, claims status, nominee/assignment status, premium due calendar and online premium payment facilitation, premium history and annual statements, for the policies converted/issued in electronic form within an e-insurance account.
IRs has ordered all the life insurers to submit a fortnightly report on digitization of policies starting from July 16 and the companies, which will not participate in the pilot program will attract regulatory action by IRDA.