The advent of online insurance has been a remarkable milestone in the nearly 200-year-old history of Insurance in India, making way for improved customer convenience and technology enhanced, paperless process improvements, among other notable benefits.
In a significant new move to simplify online insurance buying further, IRDAI has unveiled a proposal to sanction eKYC as an acceptable form of KYC procedure for buyers of online insurance schemes.
CAMS Insurance Repository Services Ltd (CAMSRep), as one of the leading Insurance Repositories in India, licensed by Insurance Regulatory and Development Authority of India (IRDAI) and a public limited subsidiary of CAMS, the No.1 Registrar & Transfer Agent to the Indian Mutual Fund Industry, has always worked towards materializing IRDAI’s vision in creating a new category of digitized Insurance Repositories.
As an entity that operates as a single point of service for e-insurance policies, making it convenient for policyholders to get service on demand, CAMSRep welcomes IRDAI’s latest decision concerning the integration of eKYC in the online insurance sphere.
Mr. S. V. Ramanan, CEO, CAMSRep, has recorded how customers could simply give their bank account numbers, to be used as identity as well as address proofs and on why there is no need for a digital signature, in this recent article as published by the Mint.
Excerpts from the article –
“In a draft exposure released on 2 September, the Insurance Regulatory and Development Authority of India (IRDAI) proposed to make e-verification of know-your-customer (KYC) details simpler for customers buying insurance online (http://bit.ly/2crzpHA ). It proposes to amend the e-insurance policy issuance regulations that came out in June and become effective from October by allowing authentication by a one-time password (OTP) as well.
“The draft has proposed to recognize electronic signature not just through Aadhaar but from any database that can verify policyholder’s KYC details. E-signature replaces the need for both wet signatures and KYC,” said S.V. Ramanan, chief executive officer, CAMS Insurance Repository Services Ltd.
Currently, only e-authentication using Aadhaar e-KYC services is recognized in the form of an e-signature.
According to the regulations, if a person buys insurance online, the insurer will have to offer an electronic proposal form and ask for e-signatures. This is the practice even now, but, according to industry experts, insurers usually ask for wet signatures for big-ticket policies (premium above Rs.50,000 in life insurance).
Moving forward, if a policyholder has an e-insurance account, an e-signature will not be required to buy a policy online. E-insurance account holds your policy in Demat form.
But if a policyholder buys a policy online without an e-insurance account, then e-signature is needed.
“These are needed to verify KYC details. Till now a policyholder could give his e-signature using Aadhaar. The number is sent to the database of Unique Identification Authority of India, which confirms the KYC through an OTP on the customer’s mobile. The customer gives this password to complete the e-signature,” added Ramanan.
The industry had sought clarification if single-factor authentication processes like OTPs could be used for verification and IRDAI has been willing to grant it to simplify the process. The June regulations only recognised e-authentication if it used Aadhaar-based e-KYC services.
“The requirement of either a digital signature or Aadhaar e-KYC on the prospect (the policyholder) is onerous and may not facilitate issuance of e-insurance policies. It is therefore recommended to allow sale of insurance products using one-time password in addition to digital and electronic signatures,” said the draft.
A digital signature works like an electronic one as it replaces a wet signature, but the KYC still needs to be submitted.
“The industry can tap into other repositories to verify KYC. For instance, the customer could give the bank account number which can be used as identity as well as address proof. The bank would then verify the details and send an OTP on the registered mobile number to complete the verification. With e-KYC there is no need for a digital signature,” said Ramanan.
This is a welcome step as it opens many doors for e-verification, making the process of online policy buying more convenient.”
About CAMS:Computer Age Management Services (CAMS) is India’s premier Mutual Fund Transfer Agency serving over 62% of assets of the industry across 16 Mutual Funds. Leveraging superior technology, CAMS brings several innovative services to Mutual Fund investors and distributors. CAMS is also a service partner to leading Insurance Companies, Banks, NBFCs and Alternate Investment Funds. To know more visit http://www.camsonline.com