Insurers yet to find ways to address issues of database, technology
WHILE the committee on electronic issuance of insurance policies is scheduled to present its recommendations to the Insurance Regulatory and Development Authority (Irda) by March 4, the debate is still on whether the present infrastructure available in the industry can support such a system.
There are simple yet critical technicalities that make online issuance a tricky business.
For instance, it is convenient for a customer to renew a car insurance policy online, but for such a system to work, the insurer must have historical data, such as previous policy and vehicle registration certificate. In most cases, this is possible only if one chose the same insurance company year after year. If the insurer is changed, there can be delays defeating the very purpose of buying a policy online.
Experts feel for a foolproof online policy issuance system to work, it needs to be robust yet flexible. Going online should mean doing more than just paying the renewal premium, viewing the latest fund value or checking claim status.
The reach of the online medium is limited. Insurance penetration through the online mode is linked to internet penetration and customers' comfort with electronic transactions. As of now, this facility can benefit only a certain segment of population that is internet-savvy and at ease with online business dealings.
Getting timely receipts for online payments can be another pain. "I needed the premium receipt by December 31, so I paid the premium online. The amount was instantly debited from my card, but the receipt was not generated. After repeated follow-ups, I was told that the payment has not been cleared by the payment gateway," said Amit Kumar MG, who finally missed the deadline for submission of his premium receipt.
In cases where medical and documents like age proof, address proof are not required, the policies are is sued online.
In cases where under writing is done at the point of sale, the process may appear longer as it requires the customer to fill in a de tailed application form and address a number of health-related questions.
Main tasks assigned to the new committee are to decide on the operational issues present in implementing electronic policy issuance, reduction in cost and any other legal complications arising out of such a procedure.
While the legal sub committee has put together a paper on the issues that need to be taken care of be fore policies are issued on line, grey areas exist.
These include customer privacy, sharing of client database, need for foolproof digital signatures and others. Verification of digital signatures will be the most important consideration. This is what will en sure that the right customer is buying the policy l and making changes in the policy documents.
