In today’s fast-paced digital world, where everything from banking to investments has been shifted online, the insurance industry is also embracing the power and benefits of digital transformation. One such significant step is the dematerialisation of insurance policies; a move that is reshaping how policyholders store, access, and manage their insurance documents.

What is the Dematerialisation of Insurance Policies?

Dematerialization of an insurance policy is the process of transforming physical policy documents into a digital format. Under this process, the digital copy is automatically stored in the policyholder’s e-insurance account (e-IA). The dematerialization of all insurance policies has been mandated by the Insurance Regulatory and Development Authority of India as of December 2023. This initiative aims to minimize the paperwork and physical maintenance of policy documents.

Key Highlights of Dematerialisation of Insurance Policies

  • Insurance Policies are now available in digital/ Demat format from December 2022.
  • Policyholders can easily convert their existing physical insurance policies to electronic documents by December 2023.
  • The cost of dematerialization of insurance policies will be borne solely by insurance companies.
  • E-KYC is mandatory for all insurance policies issued on or after November 2022.

Also Read: What is Digital Health Insurance?

List of insurance repositories storing electronic documents in e-IAs

  • CAMS Insurance Repository Services Ltd.
  • National Securities Depository Limited (NSDL)
  • Karvy Insurance Repository Ltd.
  • NSDL Database Management Limited
  • Central Depository Services (CDSL)

The insurance repositories will be subject to regulations.

Key Benefits of Dematerialisation of Insurance Policies

  • Following the dematerialization of insurance policies, insurance companies now feel more at ease conducting business.
  • Insurance policies are now easier to store and more affordable.
  • Now, both the insured and nominee can get access to insurance policies in one place.
  • The insurance company can view remotely details such as nominee details, policy expiry dates, and maturity status, etc.
  • In digital format, the insured can make edits to their nominee details and residential address at any time.
  • The insured can download the policy documents whenever required.
  • No paperwork is required when buying/renewing policies, or raising claims.
  • There will be no worries of misplacement of insurance-related documents; soft copies of the insurance policy will be digitally secured.
  • Now that the digital format insurance policy copy is available, banks find it more convenient to grant loans against insurance policies.
  • Dematerialisation of insurance policy minimises agency fraud as intermediaries are not involved.
  • An automated process for insurers and a hassle-free digital experience for the insured.

Dematerialisation of insurance policies

IRDAI has mandated the dematerialisation of the following policies.

  • Dematerialisation of Car Insurance Policies
  • Dematerialisation of Bike Insurance Policies
  • Dematerialisation of Health Insurance Policies
  • Dematerialisation of Life Insurance Policies

The Process to Open an Insurance Demat Account

  • Download an e-insurance account application form available on the website of the insurance repository.
  • Please fill in the form and share it with your respective insurance provider.
  • After creating the insurance repository, we will generate a unique e-insurance account number on your behalf and share it with your insurer.
  • Once your account has been created, you will receive a notification.

Bottom Line

Dematerialisation of insurance policies marks a significant leap toward adopting digital insurance empowerment in India. It not only simplifies management of insurance policies but also aligns perfectly with the vision of a “Digital India". With IRDAI promoting digital adoption and insurance companies embracing technology, dematerialisation is set to become the standard for all insurance policies in the coming years.
As more customers demand convenience and accessibility, the shift toward fully digital insurance is inevitable.