Digitized policies may soon become a reality for insurance policies if IRDA has its way. The insurance regulatory has circulated a draft amongst stakeholders, which makes it mandatory to issue policies with annual premium of over Rs 50,000 in an electronic form. However, insurance company will seek to policyholders' consent before issuing the electronic policy.
Although, policyholders will retain rights to ask for a physical copy of the policy, but at the time of policy issuance, insurers will have to specifically enquire whether they would like to exercise the option of receiving the policy in an electronic mode. Also, even if a policyholder insists on a physical policy, insurer will have to issue it in an electronic form as well.
Motor and health policies, where premium amount is more than Rs 10,000 will also come under the purview of this new law. Likewise, group life and health insurance policies, offered by companies employing over 50 employees, will have to be issued in the electronic mode.
IRDAI has authorized five entities- NSDL, Central Insurance Repository, CAMS Insurance Repository, Stock holding Corporation of India (SCHIL) and Karvy Insurance Repository — to dematerialize physical insurance policies.
Source: This news was published on April 21, 2015 in economictimes.indiatimes.com under the title: E-insurance may soon be a must for high-value life insurance policies