Q. Demat for equities is the norm. Being optional, will e-insurance accounts become popular?
A. While equity demat account equals convenience, e-insurance is more about safekeeping of your policies. Take the recent tragedy in Uttarakhand. When people lost their homes, they also lost their policy documents. How can they file a claim now? In e-policies, there is a third-party record-keeper, the repository, which acts as a facilitator for claims. The repositories will also be service providers, for instance, for paying premiums online. They will also be touch points for services such as nominee & address change and switch of funds (in case of market-linked products).
Q. While inaugurating the system, the finance minister asked Irda to set timelines for making it mandatory. When can we expect it?
A. It will take at least three to four years. I think it will happen in a phased manner.
The regulator may first mandate that all polices sold electronically be held in this form. Later, it can be extended to all new polices, and then include old policies.
Q. What if a customer has policies from different insurers that have tie-ups withdifferentrepositories?
A. The original guidelines had prescribed that an insurer should tie up with all repositories. However, in July, the regulator modified the guidelines.
"Irda may first mandate that all plans sold electronically be held in demat form. It can later be extended to all polices"At present, the insurer is free to choose one or multiple providers. The reason for the change was that some insurers said they needed to first test the concept and so could not tie up with all five repositories.
It is just a question of time, at the most one year, before the guidelines are changed, as convenience to the policyholder will be taken into account.
Q. Where should a policyholder go to open an e-insurance account?
Other than the repository offices, there is a concept of an 'approved person'. The guidelines prescribe that corporate agents, insurance brokers and business entities with Rs 5 lakh paid-up capital which have serviced customers for at least three years can act as approved entities. We are in the process of tying up with such entities.
Q. Have you started getting requests?
A. Yes, we have started getting requests. We have opened nearly 1,600 e-insurance accounts already. There are also requests from people that they want to convert their LIC policies too. LIC hasn't tied up with any of the repositories and so we are directing queries from its policyholders to the insurer.
Q. Do you think you have launched the service a bit early as the largest insurer, LIC, as well as most private insurers are not on board?
A. An e-insurance repository account is convenient and free of cost. So, it is better to open an account now. As and when your insurer comes on board, you can transfer your policy into the electronic format and start consolidating your portfolio.