The new year is coming, bringing many changes along with it. One of these is the change in the rules for taking insurance, but how are these changes beneficial for you. Let’s know…
There are only two days left for the new year i.e. 2023 to begin. Along with this, many things related to your investment are also changing. But now we will talk only about the rules that are going to change in the insurance sector.
At present, KYC documents were not required for general insurance such as health insurance, vehicle insurance and travel insurance etc. in the country. But in the new year it will become mandatory. But how will it benefit the life of a common man or an insurance taker? This is what we are going to tell you…
By the way, let us tell you that the work of making KYC i.e. Know Your Customer document mandatory has been done by the insurance regulator IRDA. This rule will be equally applicable for general insurance policies with minimum to minimum premium.
What are the current rules regarding KYC?
At present, KYC document is not mandatory for buying non-life insurance or general insurance. In the case of health insurance, if the claim amount is more than Rs 1 lakh, then customers must provide their PAN number and Aadhaar number. In the new system, this system of KYC is being transferred at the time of buying insurance instead of claim.
Will the new rule apply to existing customers?
Till now, providing KYC documents was voluntary for the customers taking general insurance. In such a situation where now this rule has been made mandatory for the customers taking the new policy. On the other hand, for the existing customers, insurance companies have been instructed to complete the KYC of their customers. In this too, two years have been given for low-risk policies, while the time for updating KYC for high-risk policies will be one year. You will get its information through SMS and email.
What is the benefit of the new rule to the common man?
One reason behind completing this KYC process even before taking an ordinary insurance policy is believed to be to prevent money laundering and terrorism financing. IRDA had also issued guidelines for this in August 2022. At the same time, many benefits of this are going to happen to the common man.
For example, the first advantage will be that it will reduce the time taken for insurance claims. The process of claim will become fast and easy. At the same time, it will ban fake claims and it will be easy to make payments to the legal heirs of the policyholders.
One advantage of this process will be that insurance companies will create a centralized data bank. This will make it easier to maintain policy records. Its long-term advantage will be that the process of renewing the policy for the customers will be faster, because then all general insurance companies will have access to the details of KYC.
At the same time, this is a beneficial step for insurance companies as well. Due to KYC details, it will be easier for them to do risk assessment regarding a customer. At the same time, it will also help in deciding the right premium.
