The Insurance Regulatory and Development Authority of India (IRDA) has said that the Aadhaar based Electronic Know Your Customer (e-KYC) process is sufficient for the customer verification. This statement has been clarified by the Insurance Regulator on Aadhaar based e-KYC for the insurance companies. It is stated that the Aadhaar e-KYC can be conducted only with the consent of the customer.
If you are planning to buy some insurance plans using the Aadhaar based e-KYC then keep these points in mind.
KYC for Insurance
For the life insurance products, there are certain regulatory guidelines that are mandatory and the insurers conduct KYC before the sale of the policy. If the sale is conducted through other channels, then the KYC must be completed within 15 days of the sale of the policy. These practices prevent from money laundering and other such activities.
For Non-Life Insurance products, like motors and the health covers, the insurers are supposed to do the KYC at the time of claims so as to prevent from the money laundering process. The KYC is only applicable if the claim settlement is over Rs 1 Lakh.
The Unique Identification Authority of India (UIDAI) has provided some specific regulations called for the Aadhaar regulations 2016, which explains the technique of how an Individual’s data is verified from the Aadhaar database.
- One verification method is the Generation of a One Time Password. Here, the one-time password is sent to the individual’s registered mobile number.
- The entity takes the OTP from the customer and moves the process forward.
- The process won’t take a year until and unless the customer does not share an OTP.
- This restricts an unauthorized access to your demographic information.
- Another Method of Verification is the Biometric Authentication process. Here the customer has to provide the biometric proof, example fingerprint at a respective device.
- The Aadhaar database enables the requesting entity only if the biometric scan matches with the information available in the Aadhaar database. This method also helps in the unauthorized access to the personal information.
The Insurance Regulator made a statement that the e-KYC process can only be conducted with the customer’s permission.
Aadhaar e-KYC for Insurance
While the Aadhaar based KYC authentication is allowed, the insurance regulator has said that it is alone enough to complete the process. Which means that it does not require any other additional documents such as identity proof, address proof etc. If in case the photograph in the Aadhaar is not clear or does not match, then the insurer may ask for additional documents.
So, if you are planning for e-KYC Aadhaar method, then make sure that details in your Aadhaar must be correct, updated and the photograph must be clear.