IRDAI's move will risk policyholder' data privacy: Experts
Chennai: The data of millions of Indian policyholders - life and non-life - is to be transferred to the Insurance Information Bureau of India (IIB), a society registered under the Andhra Pradesh Societies Registration Act as per the regulations proposed by the insurance regulator.
But, the industry experts are not in favour of Insurance Regulatory and Development Authority of India's (IRDAI) move as it may impinge on data privacy. Further such a move makes IIB a monopoly of insurance data in the market.
As per the draft Insurance Regulatory and Development Authority of India (Insurance Information Bureau of India) Regulations 2021, IRDAI will amend its regulations relating to the protection of policyholders. The IRDAI has said insurers while maintaining confidentiality of the policyholder information, will have to share the same with (a) authorities/agencies as may be specified by law/due to operation of the law and also with IIB.
"World over, this is blue murder. Even for credit score, a customer has to give his consent to any rating agency like CIBIL, to pass on to a lender. In this case, the policyholder is conveniently ignored in respect of his confidential data. Not done, please," an industry expert said preferring anonymity.
While it is understandable that insurers have to share policyholder information with authorities/agencies specified by law or due to operation of law, experts question the need to share the same with IIB.
"Insurers can share the generic data relating to premium, claims - genuine and fraud -- and other commercial aspects with IIB so that it can prepare its analytical reports for the industry to use. But why should policyholder information be shared with IIB," wonders an industry official preferring anonymity.
"IIB was registered as an independent society so that it can be at arm's length with IRDAI as many insurers were highly sceptical about confidentiality of data being compromised if it is part of the regulator," a senior industry expert said preferring anonymity.
According to the expert, it is certainly not correct to call for policyholder specifics as that was the measure which helped to overcome the insurers anxiety over poaching. Perhaps, the consent of the policyholders has to be obtained for this purpose as in the case of the account aggregator system.
IIB cannot be equated with TransUnion CIBIL or CIBIL that maintains data about credit histories of borrowers. A good CIBIL score may get a borrower a loan at a reduced interest rate. But a policyholder may not get a lower premium rate as IIB does not give any claim or underwriting score.