In order to reduce transaction costs and ensure swift modifications in insurance policies, the sectoral regulator Irda on Friday unveiled guidelines for issuing them electronically.
It also laid down the guidelines for repositories, which compile and store data about policyholders on behalf of insurance companies.
"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," Insurance Regulatory and Development Authority (Irda) said.
Now, insurance companies can sell all the polices, be it life, pension and non-life, in the electronic form.
Irda said that making available e-insurance policies would bring about efficiency, transparency and cost reduction in issuing and maintaining them.
The guidelines state that an insurer issuing 'e-insurance policies,' shall have to take services of a registered repository.
"All such insurance policies in electronic form shall be treated as valid insurance contracts," Irda said.
A certified insurance repository has to have a networth of at least Rs 25 crore (Rs 250 million), without any foreign investment, and wherein no insurance company can hold over 10 per cent or hold any managerial position.
"The insurance repository before commencing the operations shall put in place measures to safeguard the privacy of the data maintained and adequate systems to prevent manipulation of records and transactions," Irda said.
Further, the guidelines said that an insurer can enter into an agreement with one or more insurance repositories for maintaining the electronic insurance policies.
