HomePersonal Finance NewsMandatory to provide KYC details while purchasing insurance from Jan 1 — Key benefits

Mandatory to provide KYC details while purchasing insurance from Jan 1 — Key benefits

You will have to provide Know Your Customer (KYC) documents at the time of buying any insurance policy. This is because the Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for companies.

By Anshul  December 29, 2022, 2:26:04 PM IST (Published)

The Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for policyholders to provide Know Your Customer (KYC) details when purchasing any insurance policy from January 1, 2023. This requirement has been put in place to ensure insurance companies have accurate and up-to-date information about policyholders, which can help assess risks associated with providing coverage and prevent fraudulent activities.

"Providing KYC details is an important part of the policy purchase process, and it is essential that policyholders comply with this requirement to ensure that their insurance coverage is properly in place," Venkatesh Naidu, CEO of Bajaj Capital Insurance Broking Ltd, told CNBC-TV18.com.

There are several ways in which the requirement for policyholders to provide KYC details can benefit customers:

Improved security

By providing accurate and up-to-date KYC details, policyholders can help to ensure that their personal information is secure and that their insurance coverage is properly in place.

"This can help to reduce the risk of fraudulent activities and protect policyholders from potential losses," Naidu said.

ALSO READ | COVID-19 health insurance policies — Check premiums of 'Corona Kavach' and 'Corona Rakshak'

Enhanced customer experience

By providing KYC details, policyholders can help to ensure that the insurance company has all the necessary information to assess their risk profile and provide them with the appropriate coverage.

According to Naidu, this can lead to a better customer experience as policyholders can be confident that they are receiving the right coverage for their needs.

Greater transparency

Providing KYC details helps to ensure that insurance companies have accurate and up-to-date information about their policyholders, which can increase transparency and help to build trust between policyholders and insurance companies.

"Overall, the requirement for policyholders to provide KYC details helps to create a more secure, transparent, and efficient insurance market, which benefits both policyholders and insurance companies," Naidu said.

ALSO READ | Insurance premiums likely to rise in 2023 — Here's how much and why

Earlier, IRDAI allowed all insurers, including life and non-life, to offer insurance plans through a video-based identification procedure, which helped complete KYC requirements online due to the pandemic.

A video KYC helped them to cross-check if the policy is issued to the real person to avoid any cases of fraud at a later stage.

ALSO READ | Insurance 2022: Consumer-friendly rules, tech adoption major trends — what's in store for 2023?