Insurance policies will soon carry an option of being available in dematerialised form.
“Work is currently on and technical verifications on data-repositories will commence soon,'' Mr J. Hari Narayan, Chairman, Insurance Regulatory and Development Authority, told Business Line here.
The regulator has already short-listed five data repositories including National Securities Depository Ltd and Karvy for the purpose.
Insurance repositories will maintain electronic data pertaining to insurance policies and allow easy access to them with the click of a mouse.
The actual launching of demat policies might happen in about five months from now.
OPTIONAL
The regulator, however, does not have any plans to make demat policies compulsory.
“We want to give an option to policyholders to go for dematerialised policies because of legal and operational aspects,'' he said.
The basic contract documents of the policy will continue to be available in physical form, he added. The Life Insurance Council has also discussed the issues arising out of demat policies with the insurers.
“There are many advantages with demat policies. There will be no question of losing the policy document. You can also have a constant update on policy account instantly,'' Mr Hari Narayan said.
The demat option is thus expected to make a big difference to policyholders, according to the regulator. As of February 2012, the total number of policies stood at a little over 35.10 crore, according to IRDA data.