Digital transformation! IRDAI mulls allowing policyholders to keep insurance policies in demat form, link with bank account | Exclusive

Soon you can keep your insurance policies in Demat form akin to stocks and mutual funds. Zee Business has exclusive information that Insurance Regulatory and Development Authority (IRDAI) is working on an ambitious project to dematerialise insurance policies on the same lines as companies' stocks held by investors. Besides, policies will also be linked to the policy holder's bank account. Apart from this, the regulator is mulling making it mandatory for policyholders to share their KYC details in non-life insurance policies. Notably, non-life insurers have for long requested IRDAI to permit verifying the contact details of policyholders. As of now, insurance companies provide policyholders a facility to keep insurance policies in electronic form with the insurance repositories. Repositories compile and store data about policyholders on behalf of insurance companies. However, this is optional and insurance companies provide a hard copy of the policy to the policyholder.

What is Dematerialisation

Dematerialisation simply means converting your physical policy document into a modifiable online object. It means that a person will no longer need to indulge in paperwork at time of renewing the policy.

A dematerialised policy will be more liquid and will be easily assigned. There will be no change in the rights as the policyholder.

The latest development is touted to be a win-win situation for both -- the insurer and the policyholder.  It is aimed at reducing transaction costs and also ensuring swift modifications in policies. Besides, it will increase the insurance companies' efficiency to enhance their customer service.