E-Insurance Account and E-Insurance Policies from 1st October, 2016
Coming 1st October will mark a change in the way insurance world works. The Insurance Regulatory and Development Authority of India (IRDA) has instructed that from 1st October, 2016 all the insurance companies should offer issuance of policies in electronic format, with motor insurance and travel insurance mandatorily to be issued in electronic format only.
The paperless form of issuing policies will help customers in buying policies more quickly and conveniently. Since policies will be issued in electronic format aka De-Materialized Format, customer needs to open e-insurance account (eIA) with insurance repositories to buy and hold the policies.
This article will explain What is Insurance Repository, What is e-Insurance Account (eIA), How to open E Insurance Account, What are the benefits of Electronic Insurance Account and Guidelines on Insurance repositories and electronic issuance of insurance policies.
What is Insurance Repository?
Insurance Repositories are the companies who are authorized and granted certificate by the Insurance Regulatory and Development Authority of India (IRDA) to open e-Insurance accounts for policyholders and maintain data of insurance policies in electronic format on behalf of insurance companies
Currently, IRDA has authorized five companies to act as Insurance Repository. Insurance Companies needs to tie-up with any of these five repositories to offer insurance policies in electronic format.
What is E-Insurance Account (eIA)?
E-Insurance Account (eIA) will be a 13 digit unique number which enables you to buy/convert and hold all your insurance policies i.e. life, health, travel, motor, mobile etc. at one place and maintain your insurance portfolio online. Account holder will be granted a unique username and password to access and transact online.
Please note that one policyholder can have only ONE e-insurance account across repositories irrespective of the number and types of insurance policies s/he owned. Thus if a policy holder opens account with say NMDL, s/he neither can open another account with same repository or new account with another repository.
How to Open E-Insurance Account (eIA)?
To open E-Insurance Account (eIA), you have to first choose the insurance repository from the list above and follow the below steps:
- Opening of E-Insurance Account (eIA) requires you to download the account opening form from the chosen insurance repository website. Alternatively, you can also fill e-insurance account opening form online on the repository web portal.
- Enclose documents to fulfill the KYC norms such as Aadhar Card for Identity Proof and Address Proof, PAN card and Cancelled Cheque (in case of ECS/NEFT services for insurance premium payment transaction) and submit these with the account opening form to the authorized center of insurance repository.
- The KYC documents shall be verified with the original documents by Approved Person at the center and if found correct and complete in all respect, the eIA will be opened within 7 days from the date of submission of application and the account details containing your eIA number, username and password shall be communicated to your corresponding address.
Further, E-Insurance Account can also be opened for minor but should be operated by a natural guardian or the legal guardian or an appointee appointed in accordance to the provisions of Insurance Act.
What is the cost of Opening eIA?
Opening of an E-Insurance Account is free and transferring of eIA from one insurance repository to another repository is also free of cost. All the services provided by insurance repositories are also free including converting physical policy into electronic form. The insurance companies will set-off the costs against the savings in policy issuance and delivery.
Once a year e-insurance account holder will receive his/her account statement, showing full details of all the policies held under eIA on the corresponding postal address or email address, if chosen. Further, on each transaction whether paying premium or buying or surrendering a policy, a statement of the details of transaction shall be sent to the corresponding postal address or email address, if chosen.
How to buy of convert your insurance policy into electronic format?
If you are buying new insurance policy then you just have to quote your eIA number in your insurance proposal form, along with a request to issue policy in electronic form. Since KYC documents have already been submitted while opening eIA, no need to provide again unless there has been any change.
In case you would like to convert your existing policy into electronic form, all you need to do is:
- Fill policy conversion form. Please note that for each insurance policy a separate policy conversion form is to be filed.
- Submit the conversion form along with the copy of policy to be converted, either to the insurance company or to the insurance repository office where you hold your account. You can also email/courier the form.
- On successful conversion of policy you will receive a SMS on your registered mobile number linked with your eIA about policy being credited to your eIA.
What types of policies can be held in e-Insurance Account?
Under eIA you can hold every type of insurance policies such as life, health, travel, motor etc and annuities plans. However, the group insurance policies would be credited in your eIA subsequently.
For simplification, criteria of issuance of Electronic Insurance Policies have been defined by IRDA in terms of Policy Sum Assured (or) Premium. Electronic policy shall be issued if either the Sum Insured or Single/Annual Premium criteria is met as mentioned below:
|Line of Business||Sum Insured* (equal to or exceeding) (in Rs.)||Single/Annual Premium* (equal to or exceeding)|
|Pure term (excluding term with ROP)**||10,00,000/-||10,000/-|
|Other than Pure term (including term with ROP)**||1,00,000/-||10,000/-|
|Immediate Annuities (Pension p.a.)||NA||10,000/-|
|All retail General Insurance policies except Motor||10,00,000/-||5,000/-|
|Motor Retail||All policies||All policies|
|Miscellaneous||Individual Personal Accident & Domestic Travel||10,00,000/-||5,000/-|
|Individual Travel Insurance (Overseas)||All Policies|
How to opt out of insurance repository?
In case you wish to opt out of insurance repository in respect of any particular insurance policy or fully with all insurance policies, you shall give the same in writing to the concerned insurance companies who in turn intimate the same to the insurance repositories.
After making necessary changes by Insurance Repository, insurance companies shall within 5 days of the receipt of intimation from the insurance repository and on fulfillment of such conditions and on payment of such fees as agreed, issue the hard copy of the policy document to the policyholder.
What are the benefits of opening E-Insurance Account and Opting Insurance Policies in Electronic Format?
- First of the all keeping the policies in electronic format mitigates the mis-selling because the agent will not be able to keep the new insurance policy till the expiry of the 15-day free-look period.
- If your policies are stored in electronic format than the risk of losing physical documents ceases to exist and the details of the policy can be accessed from anywhere and anytime.
- The e-policy option would make the process of renewing pretty hassle free. Also, Service Request like change of address, nomination etc. is required to make only one time with the insurance repository and will take effect on all policies stored in the electronic form under eIA.
- E-Insurance Account will make the process of making claims more efficient and also the benefits of money-back installments /survival benefits can be done electronically through the registered bank a/c of the policyholder.
- To make the process more credible and safe, IRDA has also recommends insurers to use two-factor authentication i.e. One Time Passwords (OTPs) in addition to digital and electronic signatures.
- The cost incurred by insurers is going to reduce by issuing policies online but there may or may not be reduction in premium. However, Insurers may offer discount in the premium rates for the policies which are not bound to be issued in physical format.
What are your views on e-Insurance Account? Are you going to open eIA soon or going to wait little before the e-policy option gets fully matured. Kindly share your thoughts on e-Policy and E-Insurance Account.