IRDAI has not yet given a deadline for linking existing insurance policies with the Aadhaar number.
Insurance companies have begun to align their processes for including Aadhaar number of customers in the Know Your Customer (KYC) details collected at time of policy sale or renewal. Insurance Regulatory and Development Authority of India (IRDAI) said in a notification yesterday that Aadhaar will be made mandatory for existing insurance policies as well as for purchasing new products.
Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance said that this is a progressive and logical step towards creating a unified platform for financial services and at the same time promote the government’s digitization agenda.
“While there may be some short-term challenges to overcome, we see significant long-term benefits in terms of preventing frauds and streamlining the KYC process. As an organization, we are committed to supporting this initiative and are aligning our processes to implement the guidelines in earnest,” he added.
The central government on June 1, 2017 notified the Prevention of Money-Laundering (Maintenance of Records) Second Amendment Rules, 2017 making Aadhaar and PAN/Form 60 mandatory for availing financial services including insurance and also for linking the existing policies with the same.
Also read: IRDAI makes Aadhaar mandatory for insurance
There is also a belief that fraudulent claims can also be curtailed by this, even though there are expected to be short-term inconveniences. Some companies like Aditya Birla Sun Life Insurance have already linked 89 percent policies to Aadhaar.
Antony Jacob, Chief Executive Officer, Apollo Munich Health Insurance said that this new mandate will further help in streamlining KYC processes for customers and shall prevent fraudulent claims. “We are positive that such initiative will further make the claim process faster and ensure better customer experience,” he added. The insurer is planning to do an awareness campaign through a series of informative promotions for our customers and distributors leveraging multiple media channels including the new age media.
Companies are also of the view that Aadhaar may reduce the turnaround time for policy purchase by a customer.
Anuj Mathur, CEO, Canara HSBC Oriental Bank of Commerce Life Insurance said that over the past couple of years, Aadhaar has been an initiative which has been driven very well across the various spectrum of businesses, regular & routine transactions thus integrating the processing and financial world.
“In that sense, once the Aadhaar number is linked to insurance policy, the fundamental aspect of buying, selling & servicing will become very easy for the consumer,” he added.
Since there is a dearth of KYC data for general insurers, this move is expected to bridge the gap.
Mahesh Balasubramanian, MD and CEO, Kotak General Insurance said that the change will help them strengthen their KYC data and which in turn will help us know our customers better. Further, he added that linking Aadhaar will enhance our capabilities to service the customer’s current policy and future needs.
Going forward, it is expected that Aadhaar will be the one-step KYC for all services. This, said insurers, would streamline new sales and claims.
Suresh Agarwal, Chief Distribution Officer, Kotak Life Insurance said that it will also ensure greater transparency in the source of funds and will go a long way in preventing frauds.
Adding to this, Ashish Kumar Srivastava, MD & CEO, PNB MetLife said that if the insured is involved in any untoward incident, the family can now get easy access to his financial information.Companies like Cigna TTK Health Insurance already applied to the Unique Identification Authority of India (UIDAI) for permission to use the Aadhaar database to authenticate and fulfill KYC requirements. Sandeep Patel, MD & CEO, Cigna TTK Health Insurance said that the customer will be required to submit the Aadhaar card detail at the time of onboarding.