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The Insurance Regulatory and Development Authority of India (Irdai) is planning to make KYC (know your customer) details mandatory for general insurers from 1 November. It should be noted that KYC documents have to mandatorily produced at the time of making insurance claims. The Irdai proposal will only bring this requirement forward to the time of buying the policy, making the claim process less cumbersome.
“Policyholders will not lose health insurance benefits because of a lack of KYC details,” says Sanjiv Bajaj, joint chairman and MD, Bajaj Capital. “Currently, KYC details are voluntary at the time of buying a non-life policy. However, providing KYC documents such as address and identity proof is mandatory for making health insurance claims of ₹1 lakh or above. Now, the regulator is planning to make KYC details mandatory at the time of buying the policy,” said Bajaj. KYC norms will be mandatory for both new as well as existing customers.
Abhishek Bondia, director of SecureNow, said, “For existing policyholders, rules allow a time frame of two years for low-risk customers and one year for high-risk customers. They need to fulfil the KYC within the specified period.”
Pros: The KYC process will help leverage the prospect of having a centralised database which will help maintain a policy record on the Bima Sugam portal. Further, it will help policyholders have their e-insurance accounts on the portal, allowing them to view their policy and easily file a claim.
Bondia said, “KYC process will ensure that no claim is paid to third parties. All payments would be made to legal heirs of the nominees, assignees and the policyholders.”
KYC compliance: According to experts, if your policy is due for renewal after 1 November, you will likely have to provide photo identity and address proof to your insurer to become KYC compliant. Besides, if you have recently purchased a policy and there is a case of hospitalization, then you will have to submit KYC documents to your insurer at the time of admission.
“You have to submit a signed, scanned copy of documents and a pre-authorization request for processing. You also need to include a copy of all these documents at the time of claim submission. For ID proof documents, one can consider a passport, PAN card, voter’s ID, driving license, etc. For the address proof, you may give copies of telephone bill, electricity bill, ration card, bank passbook, etc.,” said Bajaj.
Naval Goel, founder and CEO of Policyx.com, said that meeting the KYC norms beforehand will result in faster claim settlements. However, there will be more clarity on the procedural part when the Irdai circular comes out”.
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