INSURANCE DEMAT - What's that now?

Let me talk on the topic directly. Lot of us have received a letter for Holding Insurance Policies in Electronic form; at least I have received a letter and lot of my family members of investors have too received it. We all have been enjoying the benefits of Demat account and would have experienced the ease and convenience that Demat form of holding Securities have brought to dealings in Securities Market. Now it’s time to hold Insurance Policies in electronic form and experience the same ease and convenience

Insurance Regulatory and Development Authority (IRDA) has authorized few companies to act as an Insurance Repository. You can now hold your insurance policies in electronic form with these companies, the way you hold your securities in Demat Account. A proposer can hold insurance policies in electronic form in a single e-Insurance Account (eIA) and offers easy online access to these insurance policies. For this, you will have to open an eIA and the insurance policies will be credited by the Insurance Company into this eIA. You can seek credit of existing as well as new insurance policies in eIA. The biggest advantage or attraction currently is….

It costs you nothing to open eIA and hold insurance policies in electronic form.

Other actual Benefits / Facilities:

·         Holding of all insurance policies in a single e-Insurance Account (eIA),

·         Doing away the hassles associated with holding the insurance policies in physical form

·         One time Know Your Customer (KYC) for opening the e-Insurance account,

·         A single point of contact for the account holder to update demographic details with insurance companies

·         Conversion of the existing paper policies into electronic policies at the request of the policy holder

·         No charges for eIA opening and eIA maintenance to the eIA holder

·         Eliminates multiple KYC

·         All insurance policies under one umbrella

·         Single view for all policies

·         Portfolio tracking

·         Ease in Premium payments

·         Account Statement from Facilitator

eIA can be opened by filling the eIA application form (attached) and submitting it to your nearest Approved Person - your DP/Broker may also be an Approved Person who will facilitate opening of eIA.

The details of the Approved Persons and the list of insurance companies, whose policies as on date can be converted into electronic form are available at respective Insurance Repositories. All Insurance Repositories are in the process of appointing more approved persons and many insurance companies are likely to join the Insurance Repository system in due course.
          

A general FAQ is reproduced below from one of the Repositories website:

WHAT IS INSURANCE REPOSITORY?

“Insurance Repository” means a company formed and registered under the Companies Act, 1956 (1 of 1956) and which has been granted a certificate of registration under these Guidelines by Insurance Regulatory and Development Authority for maintaining data of insurance policies in Electronic form on behalf of insurers including the history of transactions during the term of Policy.

WHAT IS eIA?

eIA stands for e-Insurance Account i.e. “Electronic Insurance Account” which will safeguard the insurance policy documents of policyholders in electronic format. This eIA account will facilitate the policyholder to access his all insurance portfolio at a click of a button through internet.

CAN ONE HAVE MULTIPLE e-IA ACCOUNTS?

No. IRDA stipulates that an individual can have only ONE e Insurance Account across Repositories, irrespective of the number of policies owned by a policy holder - thus, if a person has an e IA with say Repository A, with any other Insurance Repository. All Repositories will have systems in place to check this before opening an e IA - any application for a second or multiple e IA will be rejected by the Insurance Repository. All the electronic policies owned by a policy holder can be credited or held under this single e IA.

WHAT IS THE OBJECTIVE OF INSURANCE REPOSITORY?

The objective of creating an insurance repository is to provide policyholders a facility to keep insurance policies in electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy in order to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies.

WHAT IS THE DIFFERENCE BETWEEN DEPOSITORY AND REPOSITORY?

A depository is a temporary storage where you put money and the value keeps fluctuating as per the market value. A repository is a place where something valuable is stored and the value is as per the agreement.

CAN ANYONE BECOME OR SET UP INSURANCE REPOSITORY?

No, only entities approved by Insurance Regulatory and Development Authority (IRDA) can become an Insurance Repository. Insurance Companies cannot set up an Insurance Repository on their own nor can they hold more than 10% stake in any Insurance Repository.

DO INSURANCE REPOSITORY SELL INSURANCE POLICIES?

No, Insurance repository cannot sell insurance policy. They just maintain record of all insurance policy which the Policyholder has purchased from any insurance company.

WHO GOVERNS INSURANCE REPOSITORY?

Insurance Repository is governed by Insurance Regulatory & Development Authority (IRDA).

IS INTERNET CONFIGURATION REQUIRED FOR INSURANCE REPOSITORY?

There is  a web based system with all Insurance Repository  Approved Person (AP) and they need to have Internet connection. The AP will be provided with User ID and Password and they can create multiple Users. Further policy holder can also login using Internet.

HOW TO OPEN AN e-IA ACCOUNT?

To open your eIA, you first need to select an Approved Person (AP), of your convenience. Use Selected Insurance Repositories search engine in contact details to find a AP who is located closest to your home or place of work.

Once you make your selection, you will be taken to an informative page of your chosen AP. If you are satisfied with what you read, you can download the eIA opening form & submit the same along with the KYC documents to the respective AP chosen by you.

WHAT ARE BENEFITS OF e-IA ACCOUNT?

Policy Servicing

•  Single request contact details updation
•  Premium alerts & payment for all insurers
•  Increased number of service touch points
•  Ease in registering bank account details for premium payment and payouts

Ease

•  One time Know Your Customer updation
•  Storage of policy in electronic format
•  All insurance policies under single eInsurance Account
•  Consolidated insurance statement on an annual basis.

Claims

•  Single view of all policies to an authorized person in case of  death of the eIA account holder.
•  One time claim intimation

CAN e-IA HOLD OTHER FINANCIAL INSTRUMENTS?

eIA will hold only Insurance policies and no other financial instruments.

WHAT ARE KYC DOCUMENTS?

KYC means (Know Your Customer) these documents include : 

• Proof of Identification (POI)           
• Proof of Address (POA)
• Proof of Date of Birth/Age

WHAT IS FEE FOR OPENING e-IA?

No fees have to be paid by the customer for opening e-IA.

WHAT DOCUMENTS ARE REQUIRED TO OPEN e-IA ACCOUNT?

Customer needs to provide

• Recent passport size photograph
• Cancelled Cheque ( In case of ECS/NEFT services for insurance premium payment transaction)

List of KYC documents:

    Identity Proof (Any One)

• PAN card
• UID

Address Proof (Any One) 

•  Regd. Lease and License Agreement/ Agreement for sale
•  Aadhar Letter
•  Ration Card
•  Driving License
•  Passport
•  Voter ID Card
•  Bank Passbook (not more than 6 months old)
•  Electricity Bill (not more than 6 months old)
•  Residence telephone Bill (not more than 6 months old)
•  Self-declaration by High Court and Supreme Court judges, giving the new address in respect of their own accounts
•  Identity card/document with address, issued by Central/State Government and its Departments
•  Identity card/document with address, Statutory/Regulatory Authorities
•  Identity card/document with address, Public Sector Undertakings
•  Identity card/document with address, Scheduled Commercial Banks
•  Identity card/document with address, Public Financial Institutions
•  Identity card/document with address, Colleges affiliated to universities
•  Identity card/document with address, Professional Bodies such as ICAI, ICWAI, Bar Council etc. to their Members

Date of Birth Proof (Any One) 

•  PAN Card
•  Domicile Certificate
•  Ration Card
•  Driving License
•  Passport
•  Voter ID Card
•  Municipal birth Certificate
•  Notarized Birth Certificate
•  Baptism Certificate
•  Marriage Certificate issued by Church
•  Identity card/document with address, issued by Central/State Government and its Departments
•  Gram Panchayat certificate
•  Identity card/document with address, Public Sector Undertakings
•  Defense ID including Ex-serviceman card issued to Defense personnel/ certificate of DOB issued by commanding officer with his seal & signature on the same
•  Identity card/document with address, Colleges affiliated to universities
•  Central Govt. Health scheme certificate for their employees/ family members/ dependants
•  Govt. service registers extract/certificates issued by Govt. to its employees
•  Employer's PF statement
•  ESIS Card ( Employees State Insurance Scheme )
•  Employer's certificate from Govt., Semi Govt., MNC, Public Ltd, Reputed Private Ltd. Organizations only. The certificate must be on the letterhead, duly signed & stamped by the authorized signatory
• Certified School/ College Extract including School/ College leaving certificate/ Degree certificates / mark sheet or hall ticket or admit card issued by Educational Board (10 & 12th std) reflecting DOB of eIA applicant
•  Policy Document of other private insurers
•  LIC Policy
•  Islander cards for Residents of Andaman & Nicobar Island
•  Pilgrim pass issued for Haj Pilgrimage

CAN AN e-IA BE OPENED WITHOUT PAN or AADHAR?

As per IRDA guidelines Pan or Aadhar is mandatory for opening an e-IA. Regret to say that you will not be able to open e-IA without that.

HOW MANY DAYS DOES IT TAKE TO OPEN AN e-IA ACCOUNT AFTER ALL FORMALITIES ARE DONE?

Though each Insurance Repository has little time frame and procedure, normally  eIA account will be opened within 07 working days and you will receive a welcome kit and Pin Mailer containing your user name and password for your account to login to the e-insurance account.

HOW TO CONVERT PAPER POLICIES INTO ELECTRONIC FORM?

Insurance repository provides demat services for conversion of existing physical policies into electronic form. Policy holders need to just follow the below mentioned steps for conversion of the policy. Steps:-

•  Fill the Request form for conversion of physical policies into electronic form
•  Surrender the existing policy document with nearest  Approved Person/ concerned Insurance Company
•  The policy will be credited within 7 working days
•  Confirmation will be sent via SMS / email

WHENEVER I REQUIRE, WILL I GET HARD COPY OF MY INSURANCE POLICY?

Yes one can take printout of e-Insurance policy for personal records whenever required.

WHICH ARE THE INSURANCE POLICIES THAT WOULD BE ELIGIBLE TO HOLD IN ELECTRONIC FORM?
All Life insurance, Health insurance , General insurance & Annuity policies that are issued by registered Insurance companies with IRDA who have signed up with the IR through whom you have opened an account eligible to be held in the electronic form. In the first phase only Life Insurance would be in electronic form.

CAN A POLICY HOLDER HOLD POLICIES IN BOTH FORMS i.e. ELECTRONIC AND PAPER?

Policy holders can choose the form in which they want their policies issued - paper or electronic. A policy can be bought or maintained in one form only - either in electronic form or paper but not in both. However, a policy holder can choose to keep some policies in electronic form and others in paper form - only the electronic policies will be reflected in his e IA account and he can use repository services only for the e policies (and not the paper policies)

WHAT WILL HAPPEN AFTER THE PROCEDURE IN DONE?

The repository will issue a unique code number to all policy holders, and their policies will come under that number. It will maintain the history of the policy details such as claims, nominees, beneficiaries and other data.  
CAN AN e-IA BE OPERATED BY ONLY THE POLICY HOLDER?

Yes, the e IA can be operated by the account holder only during his life time, unless, of course, he has been unfortunately rendered incapable to operate it (incapacity due to mentally unsound means or terminally ill as certified by a medical practitioner). In such circumstances, the e IA may be operated by the Authorized Representative (AR) appointed by the account holder (pl see below for details).

The account holder is strongly advised to keep the log In ID and password for online access of his e IA confidential and not share it with anyone else.

WHICH ARE THE AUTHORISED COMPANIES AS INSURANCE REPOSITORIES?

As of now the insurance regulator has permitted NSDL Database Management Ltd, SHCIL Projects Ltd, Central Insurance Repository Ltd , Karvy Insurance Repository Ltd and CAMS Repository Services Ltd to act as insurance repositories.

WHICH COMPANIES HAVE REGISTERED AS PARTICIPATING INSURANCE COMPANIES?
(List is recently upated, and hence including details now)

-- ICICI Prudential Life Insurance Company Limited

-- HDFC Standard Life Insurance Company Limited

-- PNB MetLife India Insurance Company Limited

-- Star Union Dai-chi Life Insurance Company Limited

-- IndiaFirst Life Insurance Company Limited

-- Reliance Life Insurance Company Limited

-- Future Generali India Life Insurance Company Limited

-- Tata AIA Life Insurance Company Limited

-- Edelweiss Tokio Life Insurance Co Ltd

-- Kotak Mahindra Old Mutual Life Insurance Limited

DO's and DONT's

Do's

• No fee to be paid to AP for opening eInsurance account (eIA)
• PAN/UID is a mandatory document for opening eIA
• Provide clear copies of KYC documents for eIA opening
• Self Attestation of KYC documents is must
• Intimate your change of address or contact details to your nearest Approved Persons (AP) immediately
• Maintain secrecy of your eIA password
• Quote your eIA number when you buy a new policy
• Signature should be uniform across all your communication
• Verify your annual eIA statement and inform your AP  about any unauthorized credit found

Don'ts

• Avoid over-writing, cancellations and misspellings in any documents
• Do not let anyone fill your eIA
• Don’t share your password with anyone.

CONCLUSION

I still remember the days when DEMAT was introduced. There  were lot of queries, lot of problems and lots of doubts on the system, but eventually we all know now, where we are. I have seen and met policy holders who don’t know what they have, where they have as far as Insurance is concerned and hence I would suggest to opt for this facility. Initially there may be problems,few insurance companies are still on board,but actually are not active enough, but the long term result seems to be  great. When DEMAT was launched, everyone was scepticle about it, but now we cannot hold paper share?

MY TAKE—SUBSCRIBE.