Covernote. A useful concept in limbo

‘Vapourware’ is a term that did the rounds in the earliest of dotcom booms around the millennium.

It referred to dotcom ventures built in thin air, with the sole objective of accessing venture capital with no revenue model, let alone plans for profit.

Many people regard insurance itself as ‘vapourware’. Cynicism apart, you can hold your insurance policies in dematerialised form (vapourised) in an e-insurance account (eIA) with one of four authorised service providers and the whole process can be facilitated by your insurance company

It is like a securities account for shares and mutual funds, or even like savings bank or fixed deposit accounts or any institutional savings for that matter!

eIAs were introduced after the insurance regulator made it mandatory for all insurers to offer policies in electronic versions as far back as in 2013. We touched upon this concept in Cover Note in December 2020 listing scores of benefits and conveniences that it offers.

In September 2022, IRDAI proposed a regulation to make all new policies issuable only in dematerialised form, thus making an eIA necessary for every policyholder.

The target date was December 2022 and all existing policies were to be dematerialised and added to the eIA one year after that. The regulation, however, has not materialised yet.

One can see multiple wrinkles and reasons, but they have been resolved and worked around when compliance became necessary as in the case of PAN-Aadhaar linking.

As for eIAs, the society is ready, technology available, the need established and the utility pretty apparent. And yet, it needs that push for full implementation.

Not surprising. Paper currency took decades to be accepted. About a century later, however, digital transactions through UPI took off into outer space within a few years.

eIA is a good idea that has not caught on, unfortunately. Much like, say, insurance?

(The writer is a business journalist specialising in insurance & corporate history)

Highlights of eIA

You can have only one eIA. You can keep insurance policies of all types issued by any Indian insurer.

Accessible with a login and password, it is a one-stop shop for policy services such as renewals, change of address, KYC, nomination, ECS for paying premium and receiving payouts and you can appoint an authorised person to operate your eIA when you pass away or are incapacitated to make claims.

New and existing policies can be dematerialised and added to your eIA, so you are safe through relocations, floods, fires and common human carelessness.

You can change your authorised person, your eIA service provider or even close your eIA and rematerialise your policies, all without a charge.

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