Paperless Insurance Likely To Come In a Year: IRDA

The Insurance Regulatory and Development Authority (IRDA) on 10th February 2012, proposed to initiate insurance transactions to be paperless, the next year. It mentioned that data repository and data warehouses are important for making insurance online/Demat or Paperless. The IRDA chairman told that by next year, the insurance industry will have a new regulatory regime for Bank assurance (Distribution of insurance by banks).

IRDA said it would finalize the depository service providers at this time and shortlisted four service providers after calling for applications. The Chief of IRDA mentioned that there are 5-6 crore policies being sold in the country every year. Once the system of paperless insurance becomes a reality, these insurance policies will be stored in the depository in an electronic form starting with one particular year.

Moreover, the IRDA chairman explained that insurance companies need to maintain strong depository for all these insurance policies and since it is an enforceable contract there should be a record of it in order to make transactions well. However, the insurance industry is still waiting to see the concept of the paperless insurance as this is not just about storing the policies in electronic form but to perform the contractual obligations.

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