General and health insurance companies can issue policy documents electronically till March 31, 2021, as opposed to previously where it had to be a hard copy, the Insurance Regulatory and Development Authority of India (IRDAI) said.
Insurers can send the policy document and a copy of the proposal form online to the registered email address or mobile number, and insurers will have to put in place mechanisms to ensure that it is delivered only to the person it's supposed to be, and an acknowledgement is received.
This applies to motor insurance policies, fire insurance, package insurance and other miscellaneous individual policies where the sum insured is not more than Rs 5 crore.
Wet signatures, or physical signatures, will not be necessary, and consent can be obtained without it, the IRDAI said. Instead, consent can be given by giving a link for confirmation or through a one-time password.
This has been done due to the pandemic, with companies making a representation to the regulatory body for individual policies.
“The policy document sent electronically shall contain all the schedules, terms and conditions, benefits etc that are otherwise available in the physical document,” it says.
If a policyholder demands a physical policy document, it will be sent. If some documents cannot be sent electronically, the physical document will be sent.
Gurdeep Singh Batra, Head - Retail Underwriting, Bajaj Allianz General Insurance, told Moneycontrol, "Issuing electronic policies is definitely a positive step considering the current pandemic situation and the challenges in issuing physical policy documents or proposal forms. This not only improves the turnaround time for policy issuance, but also secures the policy documents electronically with the policyholder as well as the insurer.”
In August, IRDAI had allowed term insurance companies to sell policies online. At the time, it had said that the freelook period will be 30 days in such cases and will be calculated from the date of policy-holder confirming the receipt of the document through calls or other means.