Compulsory provision of Kyc details when purchasing insurance from 1 January – Key benefits

You must provide Know Your Customer (KYC) documents at the time of purchasing an insurance policy. Because the Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for companies.

The Indian Insurance Regulatory and Development Authority (IRDAI) has required policyholders to provide Know Your Customer (KYC) data when purchasing an insurance policy from 1 January 2023. This requirement was introduced to ensure insurance companies have accurate and up-to-date information about policyholders, which can help assess risks associated with the provision of insurance coverage and prevent fraudulent activity.

“Providing KYC details is an important part of the policy buying process and it is important that policyholders meet this requirement to ensure their coverage is properly in place.” Venkatesh Naidu, CEO of Bajaj Capital Insurance Broking Ltd said

There are several ways customers can benefit from requiring policyholders to provide KYC details:

Improved security

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

“This can help reduce the risk of fraudulent activity and protect policyholders from potential losses,” Said Naidu.

Improved customer experience

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

Corresponding Naidu, TThis can lead to a better customer experience as policyholders can be confident that they are getting the right coverage for their needs.

more transparency

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

“Overall, requiring policyholders to provide KYC details helps create a safer, more transparent and more efficient insurance market that benefits both policyholders and insurance companies,” Said Naidu.

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

A video KYC helped them verify that the policy was issued to the real person to avoid fraud at a later date.