Insurance companies have got permission from the Insurance Regulator and Development Authority of India for a video-based identification process for the KYC process. Insurance companies have advised for developing their application for a live personal identification process.
This move was put forward by IRDAI due to the awake of the COVID-19 pandemic. Last month, the regulator allowed all life insurance companies to get customer’s consent without requiring a wet signature on the hard copy of the proposal form until December this year.
The authorized person of the insurance company doing the identification process for KYC will have to record the video and take photographs of the customer present for identification and obtain the identification information through Aadhaar. The live location of the customer also will be captured to verify his physical presence in the country. The insurer has to make sure the customer’s face is visible and the video is clear. The insurance companies expecting that digitalization in the insurance sector also can be achieved through this process. It will reduce the paperwork and reduces operational costs while improving the reach, penetration, and efficiency in the insurance service industry.
Insurers will have to ensure that the video recording has the date and time stamp and is stored safely and securely as per the Prevention of Money Laundering Act. To ensure security, robustness, and end-to-end encryption, the insurers shall carry out software and security audit and validation of the identification process application before rolling it out.
Last month the regulator allowed the insurance companies to send the completed proposal form to the customer’s registered e-mail ID or mobile number with a link. If the prospective customer wishes to consent, then he can click the confirmation link or validate the one-time password. Insurers will have to carry out pre-verification calls in respect of all such proposals. It has also allowed life insurers to issue electronic or e-policies to the customers on their email IDs during the current financial year to address the difficulties faced by the companies in printing and dispatch of policy documents due to the pandemic.