In order to promote paperless transaction in the insurance industry, IRDAI has issued a notification in which it has allowed insurance companies to offer discount to policyholders on electronic insurance policies or e-insurance policies.
Simply put, policyholders who opt for e-insurance policies mightl have to pay less premium compared to what they could have paid to buy physical policies.
In the circular, IRDAI said, “An insurer may offer discount in the premium rates to the policyholders for such electronic insurance policies exempt from issuance in physical form. Such discount shall be in accordance with the discount rates filed under the product approval or the file & use guideliens or as specified by the authority.”
In addition, IRDAI has asked insurance companies to issue proposal form in electronic form while issuing such policies. Also, IRDAI has mandated insurance company to issue e-insurance policies to all policyholders in disaster prone and vulnerable areas. IRDAI has issued a list of such areas.
e-insurance policies can be kept in e-insurance account which provides policyholders a facility to buy and keep their insurance policies in electronic form. They can convert their new as well as existing policies into electronic form. Like R&Ts of mutual funds, the insurance repositories (IR) hold electronic records of insurance policies issued to policyholders. Policyholders can merge all policies like health, motor, life insurance etc. in a single account. The policyholders can modify or update their information like change in address, nomination etc. through their e-insurance account.
Recently, IRDAI has come out with an exposure draft on e-commerce distribution in which it has proposed to allow insurance companies and insurance intermediaries like brokers and agents to distribute insurance policies by floating e-commerce platform called Insurance Self-Network Platform (ISNP). However, to buy policies through e-commerce distribution channel, policyholders are required to have e-insurance account.
The move is likely to help e-insurance accounts become more popular.
