Concept of dematerialisation is catching up in this sector also
About a hundred years ago, the British Government in India had set up the new currency press in the city then called Bombay and was persuading the wary common man to use paper money in the place of coins. We know how popular it became, but wait! Wariness about paper currency is back!
Today, every milk delivery boy and keerai seller is fine with BHIM or Google Pay, with the pandemic making the act of contact with people or objects much dreaded.
Moving to a more sophisticated financial transaction, the concept of dematerialised securities was pushed through successfully in India and had been well-accepted.
A useful recent development has been that you need not carry your original vehicle insurance policy but an electronic copy will do if it is in the eParivahan app.
Another insurance-specific recent move is that now you can digitally sign your life insurance policy proposal form. This was introduced in a limited way for pure risk life insurance policies, term policies, sold by agents and intermediaries until the end of December and has now been extended to the end of this financial year and to all types of life insurance policies. It comes with checks and balances and the regulator is yet testing the ground on this move.
Dematerialisation of insurance itself dates back to 2013, when the concept of demat accounts for insurance policies, called e-insurance accounts (EIA), was introduced. This would be a good time to push for large-scale adoption of the system.
There are four service providers with whom you can open an EIA, namely NSDL Database Management Limited, Central Insurance Repository Limited, Karvy Insurance Repository Limited and CAMS Repository Services Limited; and, your insurance company can facilitate in submitting the application that you can download from repositories’ websites and fill in.
An individual can have only one EIA and in it, you can keep your insurance policies of all types such as life, general, health and annuities issued by any Indian insurer. You will have a login and password for it and you can use the account as a one-stop shop for various policy-servicing requirements such as receiving renewal alerts, effecting changes of address, KYC compliance, nomination, registering bank account details for paying premium and receiving payouts. You will receive an annual statement of your insurance portfolio as well.
What is more, you can appoint an authorised person who can operate your EIA when you pass away or are incapacitated to make claims. He would be only a facilitator and would not be entitled to receive any policy benefits unless also designated as a nominee or assignee.
You can also change your authorised representative through the repository.
Your existing paper policies can be dematerialised and added to your EIA and policies you buy, going forward, can be requested in electronic form directly, and hence, your insurance records are absolutely safe even in the face of relocation, floods, fires and common human carelessness! If you wish, you can also close your EIA and rematerialise your policies.
You can also port your EIA from one service provider to another free of cost. And, that’s not even surprising because even the basic EIA is a free-of-cost service!
(The writer is a business journalist specialising in insurance & corporate history)
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