Digitisation of insurance policies should be made mandatory, Union Minister for Finance P. Chidambaram has said.
Speaking after formally launching the insurance repository system of Insurance Regulatory and Development Authority (IRDA) here on Monday, Chidambaram asked the regulator to have a time frame for mandatory digitisation. As of now, it is not mandatory.
“This should have been implemented long back,” he said adding that digitisation would help even in natural calamities as people tend to lose documents along with property.
Referring to the recent floods in Uttarakhand which claimed many lives, the Finance Minister asked Life Insurance Corporation and the public sector general insurance companies to open camp offices in Uttarakhand to facilitate speedy settlement of claims.
T.S. Vijayan, Chairman, IRDA, said repository services would significantly lower the cost of issuing policies and managing them while providing flexibility and speed of service. Five firms, including Karvy Insurance Repository, were given licence by IRDA for the purpose.
Insurance penetration in the country as of 2012 is only 3.96 per cent and there is huge potential for expansion, he said. The industry should design customised insurance policies with enhanced use of technology, he added.
Various initiatives for consumer education are also being taken up by the regulator, he said.
Claimed to be the first-of-its-kind service in the world, insurance repository services will offer insurance policyholders option to access their insurance policies online by opening an insurance account in the electronic form, free of cost.
A log-in and personal identification number will be provided to the account holders. Interestingly, it is possible to open the account even if one does not have a life or non-life policy in his/her name as it can be linked later.