You may get discount on insurance premiums if you buy policy online

Recently, the insurance regulator issued draft guidelines on the dematerialisation of new insurance policies. For this, the insurance body has sought comments from all stakeholders by October 20.

IRDAI has urged all insurance companies to dematerialise their new policies by December 2022 and existing ones by December 2023.

Dematerialisation means converting the physical policy document into a modifiable online object. It means that a person will no longer need to indulge in paperwork at the time of renewing the policy. It is aimed at reducing transaction costs and also ensuring swift modifications in policies.

In its exposure draft , IRDAI called for improved efficiency in the conduct of insurance business by enabling the insurers to adopt technology to build capabilities:

For solicitation of insurance business through an electronic platform.

To issue e-insurance policies procured either through an electronic platform or otherwise.

To mandate the use of electronic insurance accounts for holding e-insurance policies.

"Every insurer soliciting insurance business through electronic mode either directly or through the insurance intermediaries shall have in place an e-proposal form consistent with the physical proposal form, with respect to the product being solicited. The e-proposal form shall also include the suitability assessment form, and customised benefit illustration, as per the extant provisions applicable," it said.

According to IRDAI, the e-proposal form, submitted by the prospect through the electronic platform, shall be valid only if it carries the digital signature of the prospect or an authorised electronic signature through an Aadhaar-based one-time password (OTP) to affirm or confirm the details. In case the prospect is not willing to verify through the OTP, either video or audio verification of confirmation method may be used, IRDAI said.