KYC could soon become mandatory for health and motor insurance policies; check details here

You will soon have to provide Know Your Customer (KYC) documents at the time of buying a health and motor insurance policy. This is because the Insurance Regulatory and Development Authority of India (IRDAI) is planning to make KYC details mandatory for general insurance companies. Currently, KYC requirement is voluntary at the time of buying the non-life policy. However, KYC documents, such as proof of identity and address proof, are compulsory for making health insurance claims, particularly if the claim amount is Rs1 lakh and above. 

Insurance experts say making KYC mandatory will help them in building a detailed database of customers which in turn will prove beneficial at the time of claim settlement. 

“Making KYC mandatory for health and motor policies will help insurance companies to build profiles of customers that will prove beneficial to all stakeholders in the long run. KYC at the initial stage will also help policyholders as it will lead to faster claim settlement. However this additional requirement will cause minor friction during the onboarding of the customer,” says Anup Rau Managing Director and Chief Executive Officer of Future Generali India Insurance Company. 

According to sources, the regulator plans to make it mandatory from November 1 but the industry has sought an extension to implement the same. 

Recently IRDAI allowed all insurers, including life and non-life, to offer insurance plans through a video-based identification procedure, which helped in completing KYC requirements online due to the pandemic situation. A video KYC helped them to cross-check if the policy is issued to the real person in order to avoid any cases of fraud at a later stage.  

Also read: Here's why more professionals are waking up to the need for a liability insurance cover

Also read: Gautam Adani first Indian to be among three richest individuals globally; total net worth reaches $137 bn