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Insurance companies – life, non-life and health are now a part of RBI's Account Aggregator (AA) system, which is a financial data-sharing framework built for investors and regulated financial entities.
IRDAI gave its go-ahead to insurers today through a circular which includes a guideline on how they can share with account aggregators (AA). Account aggregators are NBFCs who retrieve financial information from various entities to provide all savings and investment data at one place. Once fully functional, investors can register on any of the above platforms and get their bank account, mutual fund, insurance, PF investment, PPF and other financial data at one place.
The circular states that insurers can share information with AAs only after taking the due consent of policyholders.
IRDAI said that insurers will have to enter into a contractual agreement with AAs with defined rights & obligations of each party and modalities of dispute resolution mechanism before sharing any information.
The regulator has asked insurers to build required interface based on RBI specification for receiving the consent, authenticating it and safely sharing the information with AAs. “There shall be adequate safeguards built in IT systems of Financial Information Providers (FIPs) in the insurance sector to ensure that it is protected against unauthorized access, alteration, destruction, disclosure or dissemination of records and data,” said the insurance regulator.
Further, insurers will have to prominently display the names of account aggregators with whom they share data.
Also, insurers will have to abide by code of conduct applicable to them including redressal of grievance of the customer before sharing any data with AA, clarified IRDAI.
The inclusion of insurance along with banking and capital markets in the AA ecosystem can impact the way MFDs service their clients as they will have access to a lot more information.