Irda To Allow Demat Account For Insurance
Buyers of life insurance will now be able to save their policies in a digital form instead of having to maintain paper copies of each transaction over the life of the policy, which typically spans between 20 and 30 years.
The Insurance Regulatory and Development Authority (Irda), the industry watchdog, is awaiting a proposal from the Life Insurance Council, an industry lobby, that will allow life insurers to dematerialize life insurance policies, just like company shares.
"Once the recommendations come to us, we will approve it," said a senior Irda official, who did not want to be identified.
"Insurance policies in demat form will help in smoother expansion of the industry, lower distribution costs, and higher transparency regarding benefit illustrations and costs involved for a policyholder."
A 12-member committee of the Life Insurance Council is expected to submit these recommendations to Irda next month, said S.B. Mathur, the council's secretary general.
Dematerialization (demat) means holding an investment in an electronic form, rather than in a physical form. Two depositories--National Securities Depository Ltd (NSDL) and Central Depository Services (India) Ltd (CDSL)--collectively hold and manage all demat accounts in the country.
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