From applying to receiving policy document, process to go entirely online

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Since all the documents are transacted online and maintained, it also improves transparency between the insurer and insured.

Buying of health insurance and motor insurance policies is going to be entirely online. From filling up the application form to receiving the policy documents, the process will become entirely digital in the time to come. The IRDAI has issued a circular to all General and Health Insurers, for the issuance of Electronic Policies and dispensing with physical documents and wet signature on the proposal form in respect of health insurance policies.

As per the circular, the IRDAI states that in the wake of Covid-19 pandemic, the Authority had received representations from the insurance companies for an exemption to all individual and retail health insurance policies issued by general and health insurance companies from the requirement to issue physical policy document and hard copy of proposal form.

Consequently, the IRDAI has granted an exemption for the issue of electronic health insurance policies, subject to the following. The exemptions shall be valid till 31.3.2021.

“Issuing electronic policies as per the IRDAI’s circular is definitely a positive step considering the current pandemic situation and the challenges in issuing physical policy documents or proposal forms. This not only improves the turnaround time for policy issuance but also secures the policy documents electronically with the policyholder as well as the insurer. Since all the documents are transacted online and maintained, it also improves transparency between the insurer and insured,” says Gurdeep Singh Batra, Head – Retail Underwriting, Bajaj Allianz General Insurance.

The insurers, however, need to ensure the following before making the process online:

i) Insurers shall send the policy document and a copy of the proposal form through digital/electronic mode. They shall be sent to the registered e-mail id or mobile number provided by the policyholder only on the specific consent provided by the policyholder.

ii) Simultaneously the policyholders shall be informed through SMS that policy document /copy of the proposal form have been sent to their e-mail id or any other digital/electronic mode.

iii) Insurers shall put in place a proper mechanism to ensure that the documents are delivered to the designated e-mail Id / mobile number of the policyholder and an acknowledgement is appropriately obtained / auto-collected on delivery.

iv) When documents are forwarded by electronic means, the mechanism of policyholder having received the document or the electronic platform having delivered the documents shall be maintained. It shall be clearly informed to the policyholder that the date of delivery of the document is reckoned for the purpose of considering any applicable free look requests.

v) Insurers shall preserve the records of such acknowledgements for further reference.

vi) The policy document sent electronically shall contain all the schedules, terms and conditions, benefits etc that are otherwise available in the physical document.

vii) Policyholders shall be also informed that printing of physical policy document and dispatch of the same along with the copy of proposal form may be delayed due to operational difficulties in the wake of ongoing COVID-19 pandemic situation.

viii) The policy document sent electronically is as valid as the physical policy contract/document.  Wherever the policyholder demands the physical version of the policy document/copy of the proposal, the same shall be made available.

ix) Wherever policy documents could not be sent through electronic means due to any reasons, the companies shall compulsorily forward the physical documents to the policyholders.

Application process without a signature on the form

Further, where proposal forms are collected for Health Insurance Policies and Motor Insurance policies, Insurers are also allowed to obtain the customer’s consent without requiring wet signature on the hard copy of the proposal form subject to following:

a) The completed proposal form shall be sent to the prospect on his / her registered e-mail ID or mobile number by means of a message with a link, as the case may be.

b) If the proposer wishes to give consent to the proposal, the same may be permitted by providing a link for confirmation or through One Time Password (OTP) duly validated.

c) Insurers shall maintain verifiable, legally valid evidence for the proposer’s consent received for the fully completed proposal form.