Come January, the 25-crore policyholders of Life Insurance Corporation will be able to hold their insurance policies in the electronic form.
The life insurer expects to tie-up with insurance repositories in the next two months, said a top official.
S.K. Roy, Chairman, LIC, said, “The guidelines (by the insurance regulator) for insurance repositories say it (tie-up with insurance repositories) is mandatory for a certain class of products and we have to be compliant. We are examining the matter and I expect it to be finalised in the next couple of months.”
The benefit of holding policies electronically is that there’s no risk of losing the physical document. Also, policyholders can pay their premiums online and renew policies through the repositories’ portals.
“It is a game changing intervention by the regulator which has huge implications,” Roy said.
Recently, the Insurance Regulatory and Development Authority permitted five companies to act as insurance repositories — NSDL Database Management, SHCIL Projects, Central Insurance Repository, Karvy Insurance Repository and CAMS Repository Services.
Policyholders will not be charged for the electronic facility as the insurance repositories will be paid directly by insurance companies.
Currently, each policyholder can open only one e-Insurance Account with an insurance repository. Many private insurance companies have already tied-up with one or more insurance repositories.
“While it is currently not mandatory for a life insurer to tie-up with all insurance repositories, it may soon be mandated as only then policyholders can hold all their policies under a single e-insurance account,” said a senior official from an insurance repository.