Dear IRDAI, we need physical policy bonds

Hard copy of policy documents for life & health insurance policy should be favoured for official documents, where authenticity of the document is at a premium. When contracts of sale or employment are maintained as hard policies, it is surprising that an insurance policy contract is available only in a digital form decided by the seller

Mumbai: Digital insurance policy document is good, but a physical policy bond is the need of the hour, feel a group of senior citizens comprising former bureaucrats and retired Army officials among others. And there is a strong logic behind their demand.

It was in August 2020, when Insurance Regulatory and Development Authority of India (IRDAI) allowed insurers to issue only electronic policy documents and exempted them from the requirement of sending insurance policies in a physical format, until March 31, 2022. The decision was taken in the wake of the Covid-19 pandemic. While the pandemic is almost over, insurers are continuing to issue only electronic policy bonds.

Talking to Bizz Buzz, Ashok Patni, a retired IPS officer, says: "As responsible citizens of this country, our group is appealing to IRDAI to help restore making available physical copies of the insurance policy to assist in quicker claim benefits."

CB Sharma IAS (Retd) and Brigadier Atul Mishra (Retd) formed the group from all ages with majority of senior citizens from across Indian States seeking IRDAI's attention for addressing the issue.

On behalf of the group, we are seeking a directive from IRDAI instructing all the insurance companies to revoke to accept both physical and the digital version of the insured policy, Patni, who is part of the group, said.

Hard copy of policy documents for life & health insurance policy should be favoured for official documents, where authenticity of the document is at a premium. When contracts of sale or employment are maintained as hard policies, it is surprising that an insurance policy contract is available only in a digital form decided by the seller, the group pointed out.

While providing both digital and physical policy document might work best in everyone' interest, an only digital policy has many negative consequences.

As per Regulation 4 of IRDAI (issuance of e-insurance policies) Regulations, 2016, an insurer has to issue both physical and electronic insurance certificates to policyholders. Since printing and dispatch businesses are back on their feet, it is only fair that insurers restore the basic right of policyholders, they feel.

According to them, insurance claims are not completely paperless. When a policyholder approaches an insurance company for a claim, they are asked to produce hard copy of the policy document and paper proof of many other documents. Therefore, there is no real environmental benefit that is accrued from insurers denying policyholders physical policies.

Also, hospitals generally require policyholders to produce both the policy document and the health card. It is not fair that at the time of a medical emergency, the policyholder has to look for a printer to print their policy documents, in case he/she doesn't have a hard copy of the policy. Moreover, accessing digital policies can be tricky many times, especially in the event of an emergency or in areas with poor internet connectivity.

Furthermore, there is not much clarity on the content that must reach policyholders whether in physical or a digital format. The process is neither standardized nor transparent. It differs from insurer to insurer. Besides, there is no standard guideline on the type of fonts, size of paper, booklet used by insurers. Digital policy packs are in English, which is not the primary language of many Indians – especially in rural areas. For the convenience of policyholders, policy packs must be multilingual, the group pointed out, they say.

When contacted, Ashish Rao, Chief Customer Experience Officer, ICICI Prudential Life Insurance Company Limited, told Bizz Buzz: "We are issuing policy-welcome kits in both physical and digital modes for over 98 per cent of new customers onboarded. However, there are multiple benefits of opening e-Insurance Accounts (e-IAs), and we urge customers to opt for this route."

Since life insurance is a long-term product, holding a policy in the dematerialized form eliminates the challenges associated with storing physical policy documents. Besides, managing multiple policies is also very convenient in the digital mode. We have opened 3,70,3794 e-IAs, which we believe is the highest in the industry, he added.

As responsible citizens of this country, the group is appealing to IRDAI to help restore making available physical copies of the insurance policy to assist in quicker claim benefits.

- Ashok Patni, retired IPS officer