Now insurance companies will also be able to get the consent of the policyholder through OTP

 

Insurance regulator IRDA has allowed health and general insurance companies to register their prospective policy buyer's consent on the offer form through One Time Password (OTP) instead of signing it. This exemption has been given in view of the increasing impact of the COVID-19 epidemic in the country. Apart from this, IRDA has also abolished the imperative for insurance companies to send the paper documents of the policy to the policyholder. However, insurance companies will have to send a copy of the policy via electronic mode to the registered e-mail or mobile number of the policyholder and consumers will also have to send an SMS to provide information about it.

 

The Insurance Regulatory and Development Authority of India (IRDA) on Thursday issued a circular to all insurance companies giving information about these exemptions. In this circular, this exemption has been reported to continue till March 31, 2021.

 

IRDA has taken this step based on the request made by various insurance companies. The companies demanded exemption from presenting hard copy and physical documents of the proposer form for all individual or retail health insurance policies. After considering this demand, IRDA stated in its circular that insurance companies can take the consent of the consumer by asking for an OTP on the registered email or mobile number instead of the hard copy of the signed offer form. However, the company must submit legally valid evidence verifying the consent taken in this manner.

 

The new standards announced by IRDA have been welcomed by the insurance companies. Insurance experts believe that this will give a boost to health insurance products, which will benefit consumers. Experts said, according to IRDA's circular today electronic policy is a very positive step. This is praiseworthy work given the current epidemic situation and the challenges faced in issuing a physical policy. Also, submitting the policy electronically will not only make the documents secure but it will also promote transparency.