Insurance Regulatory Development Authority of India (IRDAI) has vide its circular dated 10th September, 2020 allowed insurance companies to digitally issue insurance policies subject to taking proper precautions and following proper systems and procedures as laid down. They have also dispensed with the requirement of physical documents including wet signatures from the insured persons again subject to following certain precautions and steps involved. This will be applicable as a short term measure due to the covid pandemic, upto 31st March, 2021. Gist of the IRDAI circular is given below:
Re: (a) Issuance of Electronic Policies and (b) dispensing with physical documents and wet signature on the proposal form
This has reference to Regulation 4 of IRDAI (Issuance of e-Insurance policies) Regulations,2016 and Regulation 18read with Regulation 8 (1) of IRDAI (Protection of Policyholders’ Interests) Regulations, 2017.
2. In the wake of Covid-19 pandemic, based on representations received from insurers, the Authority, in exercise of powers vested under proviso to Regulation 4(iii) of IRDAI (Issuance of e-Insurance policies) Regulations,2016 hereby grants exemption to insurers from the requirement of (a) issuing policy document and (b) copy of the proposal in physical form in respect of the following, subject to insurers complying with certain requirements as stated in Para 3 of this circular.
i. All Motor Insurance policies
ii. Fire Insurance policies covering Dwellings and/or contents thereof issued to individuals
iii. All package insurance policies issued to individuals (e.g. package policies for Dwellings)
iv. All Miscellaneous policies issued to individuals where the Sum Insured does not exceed Rs. 5 Crore.
3. Issue of electronic policies: The above exemption for issue of electronic policies is granted subject to the following:
i. Insurers shall send the policy document and a copy of the proposal form through digital/electronic mode. The documents shall be sent to the registered e-mail id or mobile number provided by the customer 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 (as may be the case).
iii. Insurers shall put in place 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 record of policyholder having received the document or the electronic platform having delivered the documents shall be maintained systematically. It shall be clearly informed to the policyholder that the date of delivery of the document is reckoned for the purpose of examining free-look requests, wherever applicable.
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. Policyholders shall be informed that the policy document sent electronically is as valid as the physical policy contract / document.
ix. Wherever policyholders demand the physical version of the policy document /copy of the proposal, the same shall be made available.
x. Wherever it is not possible to send the policy documents through electronic means due to any reason, insurers shall necessarily forward the physical documents to the policyholders.
4. Dispensing of Wet Signature on Proposal Form: With regard to the requirement under Regulation 8 (1) of IRDAI (Protection of Policyholders’ Interests) Regulations, 2017 in respect of proposal forms, Insurers are hereby allowed to obtain the customer’s consent without requiring wet signature on the hard copy of the proposal form subject to following:
i. 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.
ii. 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.
iii. Insurers shall maintain verifiable, legally valid evidence for the proposer’s consent received for the fully completed proposal form.
iv. Insurers shall be responsible for the following:
a) Providing approved digital sales material to insurance agents/intermediaries and ensure that only that material is used while soliciting the business;
b) Authenticating the e-mail IDs / mobile numbers of the proposers including through de-duplication of the data and such other means;
c) Ensuring the suitability of the product being sold
5. The exemptions granted herein shall be valid till 31.03.2021.