General insurers urge IRDAI for mandatory KYC of customers   – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/money-and-banking/general-insurers-urge-irdai-for-mandatory-kyc-of-customers/article65496778.ece

At present, sharing KCY details is voluntary while purchasing a general insurance product

Non-life insurers have requested the insurance regulator IRDAI to permit verifying the contact details of policyholders. This would enable them to get in touch with customers during an emergency and help them with sales.

General insurers have pointed out that for any financial transaction such as mutual funds or bank account opening, KYC is needed.

Some provisions should be made for general insurance products to allow them to get updated addresses and phone numbers. At present, sharing KCY details is a voluntary choice by the customer while purchasing a general insurance product.“The problem right now is that we do not have any details of the customers. We do not want PAN or Aadhaar or income details but the basic contact information should be available so as to allow us to get in touch with a policyholder in time of need,” said a general insurer, adding that there is no way to connect with a policyholder at present.

This vacuum was especially felt during the pandemic when insurers tried to get in touch with policyholders for awareness and communication as well as claim processing.

“We don’t know how to reach a customer and we also don’t know when somebody calls me to lodge a claim if they are a genuine customer,” noted another insurer.

“Many a time the policyholder was unwell and alone in the hospital while his phone was with a relative or friend,” the insurer further said.

He added that the move would help them understand and create a customer profile and better target and sell products.

The general insurance industry is understood to have requested the Insurance Regulatory and Development Authority of India to look into the issue.

“We have taken it up and we hope the regulator is considering this positively, but the lacuna of general insurance is that it does not have a verified contact data of the customer. We are handicapped in also knowing the customers,” the second insurer said, adding these details are often available with the agents, but they do not share these with the insurance company.

The IRDAI had in 2019 asked insurers not to seek Aadhaar mandatorily and PAN/form 60 from the proposer/policyholder as part of KYC following the Supreme Court ruling of 2018.

Published on June 05, 2022

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