Battle of the KYCs: Life versus general insurance

While life insurance companies in India are having few problems in implementing uniform know your customer (KYC) norms under iTrex - the general insurance industry is struggling to bring in norms and has made multiple representations to the regulator. The industry asking for extensions on the October 1 deadline for implementation.
All insurers have been told to upload data onto iTrex, the digital platform for insurers and insurance repositories that helps them look up e-insurance account details and exchange e-KYC and policy data.As per Insurance Regulatory and Development Authority of India guidelines, no customer can have more than one e-account across all insurance repositories, therefore there needs to be a central mechanism (iTrex) to ensure there are no duplicates. The iTrex facility, which can be used by insurers and approved persons to check the existence of e-account before accepting the KYC application form.
While life insurers have monoline products and detailed KYC forms, general insurers, who covers motor, health, terrorism, fire, catastrophic events, marine cargo, have more basic KYC forms as they require lesser details about their customers for the annual contracts.
"In commercial vehicle insurance - the policyholder could be different from the driver, owner, operator or aggregator of the vehicle. I could take health covers for my children, wife, parents, employees, domestic help - just about anyone. The name of the policyholder, nominee, vehicle ownership - there are too many variables in the general insurance industry, which is why we never as our customers as many questions as life insurers do when they fill up KYC details," says Sanath Kumar, CMD, National Insurance Co.
"General insurance is mostly an annual contract and we don't require the same set of details as life companies, so we've informed the IRDA, data repositories as to the difficulties in implementing it on the ground," says National's Kumar.
The IRDAI regulations on e-policy and e- insurance accounts is effective from October 01, 2016. "The implementation of e-insurance accounts requires IT integration as well as system and process changes, which we are still working on. Many companies have approached the authority for additional time for its complete implementation," admits Easwara Narayanan, chief operating officer, Future Generali India Insurance.
"However, while e-insurance accounts are not mandatory, Demat accounts are compulsory for investment in securities like mutual funds. The task at hand is to educate customers on the benefits of dematting policies. Moreover in case of motor insurance, insured has to mandatorily carry evidence of a valid motor insurance policy whereas neither the Motor Vehicles Act nor the IRDAI e-insurance regulations exempt such policyholders from carrying a physical copy of insurance," says Future Generali's COO Narayanan.