“For the consumer, it means a quicker and hassle-free process, which will help bring in further transparency and security given the electronic format. From the industry point of view, this will certainly be a significant step in insurance penetration and coverage of larger masses,” said Sanjay Datta, Chief – Underwriting, Claims & Reinsurance – ICICI Lombard General Insurance.

These policies will not need physical documents from the insurer

From now on, the customers can buy health insurance policies digitally. For motor insurance policies, the physical documents of the policy are not needed. The rule will be applicable for all miscellaneous policies issued to individuals where the sum insured does not exceed ₹5 crore, said IRDAI. All package insurance policies issued to individuals can also be purchased online. Fire insurance policies covering dwellings will also come under this new rule. The rule will be applicable till March, 2021.

The insurance companies, however need to follow these process

1) Insurers shall send the policy document and a copy of the proposal form through digital. They 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.

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

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

4) 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.

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

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

7) 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.

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

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

“While most Insurers would have been sending Insurance policies on email and SMS to their customers, the regulation permits Insurers to not send a physical copy, provided the customer agrees. This will be good for customers as their digital policy copy can reach them instantly upon being issued,” said Shanai Ghosh, Executive Director & CEO, Edelweiss General Insurance.

Application process without a signature on the form

Further, where proposal forms are collected for 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.

“Earlier, to obtain consent of prospective policy holders, wet signature on the policy document were required which was a time taking process and difficult to execute in the current situation. The option of taking consent through one-time password would further help to reduce the time taken for the delivery of policies,” said Dr Bhabatosh Mishra, Director Underwriting, Products & Claims at Max Bupa Health Insurance.