IRDA to allow demat account for insurance policies

The Insurance Regulatory and Development Authority (Irda), the insurance industry watchdog, is planning to allow life insurers to dematerialize life insurance policies, just like company shares. So, the buyers of life insurance will now be able to save their policies in a digital form instead of having to maintain paper copies of each transaction over the life of the policy.

Insurance policies in demat form would help in expansion of the industry, lowering costs and higher transparency regarding benefit illustrations. The Life Insurance Council is expected to submit these recommendations to IRDA in the next month.

The major benefits of a demat form for insurance will be the ready disclosure of all policy-related information, covering commissions and fees paid to the company, exact benefits offered, premium payment and renewal-related dates, and terms and conditions of risks covered.

The Life Insurance Council is checking if the technology available at NSDL and CDSL, which collectively hold and manage at least 16 million, demat accounts in the country, is suitable, and if all required information related to the different types of life policies can be handled by the depository houses.