Mandatory KYC to buy health, auto and other insurance from January 1
As of today, policyholders will be required to provide Know Your Customer (KYC) documents to purchase all insurance policies
The rule applies to all types of insurance: life, general and health insurance.Until now, sharing KYC documents was a voluntary option when buying a policy
Starting today, policyholders will need to provide Know Your Customer (KYC) documents to purchase all insurance policies. The Insurance Development and Regulatory Authority of India (IRDAI) has made KYC standards mandatory for the purchase of health, car, home, etc. for the purchase of all new insurance policies. The rule applies to all types of insurance: life, general and health insurance.
Until now, sharing KYC documents was a voluntary option when purchasing a policy. However, from today onwards, insurers will have to collect KYC documents from their respective customers.
With this new rule, experts believe the claim process could become faster and smoother as insurers will have a detailed profile of customers. For insurance companies, KYC details can help improve the accuracy of risk assessment and pricing and can reduce the risks of fraudulent claims.
In other news, Irdai called on insurers to consider giving health and general insurance renewal discounts to policyholders who received three injections of the Covid-19 vaccine. The insurance regulator has also called on life and non-life insurance companies to resolve Covid-19-related claims as soon as possible and cut paperwork, PTI news agency reported.
The regulator also urged insurers to ensure integrated hospitals are barred from receiving deposits for Covid hospitalization, adding that some hospitals allowed themselves to ask for deposits for Covid treatment during the first and second waves despite having a cashless policy. Insurers should create a war room for Covid-related care for all worst-case scenario stakeholders, the industry has called on, adding that the data must be reported in a pre-established format so that there are no discrepancies.
On the other hand, the insurers have asked the regulator to look into the standardization of the treatment protocol so as to minimize cases of fraud. Insurance companies have settled more than 2.25 lakhs of death insurance claims due to Covid up to March 2022, Irdai said in its latest annual report.