Driven by technology, the insurance sector regulator Insurance Regulatory and Development Authority of India (Irdai) is set to amend its policy to drive the insurance sector via digitisation. The regulator has already asked the insurance companies to issue digital policies via Digilocker to their policyholders and educates their customers on how to use digital documents.
In a recent circular issued by Irdai, the Digilocker team in NeGD (National e-Governance Division) under the Ministry of Electronics and Information Technology will provide necessary technical guidance and logistic support to facilitate the adoption of Digilocker.
Under the Digilocker initiative, which is also in line with the Union governments Digital India initiative citizens can get authentic documents/ certificate in digital format from original issuers of these certificates. It aims at eliminating or minimising the use of physical documents and will enhance the effectiveness of service delivery, making these hassle free and friendly for the citizens.
The new digitisation in insurance is likely to bring down the insurance cost and help in speeding up the claim settlement process. According to a notification issued by Irdai, all insurers excluding GIC Re, Lloyd's (India) and FRBs (foreign re-insurance branches), “the new Digilocker system is likely to drive the reduction in costs, elimination of customer complaints relating to non-delivery of policy copy, the improved turnaround time of insurance services, faster claims processing and settlement, reduction in disputes, reduction in fraud and improvement in customer contactability,” the notification said.
The digitisation in the insurance sector will also bring better customer experience, the notification said. The insurance regulator has also advised all insurers to enable their IT systems to interact with Digilocker facilities to enable policyholders to use Digilocker for preserving all their policy documents. The move is likely to further the adoption of Digilocker in the insurance sector.
The regulator in its notification also asked the insurers to inform their retail policyholders about Digilocker and how to use it. “Insurers are also advised to enable the process by which the policyholders can place their policies in the digilocker,” the regulator said.
Meanwhile, the move comes following a letter written by Sanjay Dhotre, minister of state for electronics & IT, communications and human resource development, to Anurag Singh Thakur, minister of state for finance and corporate affairs with regards to the issuance of digital insurance policies to citizen's DigiLocker accounts. The minister in his letter has asked Thakur to advise Irdai to issue an advisory to all insurance companies to make available the digital insurance policy of all policyholders via their Digilocker account and acceptance of Digilocker issued documents as valid documents.