IRDAI plans to dematerialise all Insurance policies

IRDAI has mandated dematerialisation of new insurance policies by this year-end. It has urged all insurance companies to dematerialise their existing or old policies by December-end, industry experts have said.

In a move to make the dematerialization process of insurance policies faster, e-KYC will also become mandatory for all insurance policies, starting November 1, 2022. Insurance policies could be dematerialised with National Securities Depository Limited (NSDL), Central Depository Services Limited (CDSL) or Karvy, according to industry experts with knowledge of the matter.

Dematerialisation or ‘demat’ will allow a policyholder to create a portfolio of insurance policies and store them in an electronic form with an insurance repository. Put simply, one will not have to engage in any paperwork while renewing his/her policy. This process would result in reduced transaction costs and quick modifications in policies.