Paperless insurance likely in a year: IRDA chief

http://www.moneyspidery.com/2012/02/11/paperless-insurance-likely-in-a-year-irda-chief/

Hyderabad:   You can expect your insurance transactions to be paperless in the next one year, thanks to an initiative by the Insurance Regulatory and Development Authority.

“We are working on making insurance paperless and have short-listed about four data repositories, including National Securities Depository Ltd, for the purpose,” Mr J. Hari Narayan, Chairman, IRDA, told newspersons on the sidelines of a roundtable on distribution in insurance organised by the Confederation of Indian Industry here on Friday.


Data repositories and data warehouses are vital for making insurance online or paperless, he added.
The first priority for the regulator with regard to distribution channels is bancassurance, which means distribution of insurance by banks.

BANCASSURANCE

“By the beginning of the next financial year, we will have a new regulatory regime for bancassurance,” the IRDA chief said.

In the draft guidelines issued earlier, IRDA favoured limited opening up of bancassurance.

Referring to decline in the life insurance industry in the first nine months of the current fiscal ended December 31, 2011, he said that the industry would close the year with about 13 per cent de-growth.

Earlier, while addressing the delegates, he said the IRDA was also taking a re-look at the nature of regulation, especially in the distribution segment.

The widening of the broking channel was needed as the existing regulation for opening branches was causing financial strain on the small brokers,” he said.

PENETRATION

Referring to insurance penetration of about 4.2 per cent, he said it was not low as a percentage of the Gross Domestic Product.

Asking insurers to build trust, he said: “Insurance depends on trust. This is a bigger issue than distribution.”
He also released a CII report on addressing distribution challenges in insurance.