All about new IRDAI regulations for KYC in car insurance

According to a recent announcement by the Insurance Regulatory and Development Authority of India (IRDAI), all new health, motor, travel, and house insurance plans would need the Know Your Customer (KYC) documentation as of January 1, 2023. Regardless of the premium of the insurance policy, the rule is applicable to all forms of coverage, including life, health, and general insurance.

So, in accordance with the new regulations, insurers must do a KYC process before selling a car insurance policy. The insurers have been given a deadline by the insurance regulator for obtaining KYC papers from current clients.

Although KYC in insurance is required for all forms of policies, we have included the process for car insurance in the section below.

Aspects of KYC rules in car insurance

The following are the characteristics of Know Your Customer (KYC) standards for car insurance:

• You must provide paperwork such as an aadhar card, a photo, a form of identification, etc., in order to comply with the KYC requirements for car insurance.

• While purchasing an auto insurance plan, new customers are required to present KYC papers.

• Insurers are urged to begin gathering the KYC paperwork for customers with active car insurance policies within a year.
  

Photo IDs and proofs required for KYC in the insurance process

• Aadhaar cards

• Passports

• Voter ID cards

• Driver's license

• NREGA job cards signed by state government officials

• In addition to picture IDs and proof of address (PoA), other papers declared by the federal government after consulting the IRDAI include letters from the National Population Registry that contain demographic data.
  

The procedure of KYC approval by IRDAI

Several KYC processes, including the following, have been authorized by IRDAI:

• The KYC process is based on Aadhaar and can be completed online or offline by policyholders.

• By the use of video-based identification, the KYC procedure will be finished by the insurer and the policyholder. It is a paperless, electronic form of identification.

• By submitting Form 60 with the PAN card and other legal documentation

• Digital KYC, according to laws against money laundering.

• KYC Identifier, a unique number given to the customer by the Central KYC Records Registry.

Individual KYC requirements

• Insurer should make every effort to verify the clients' true identities.

• To ensure that no contract is signed under a fictitious or anonymous identity, insurers must proceed with extreme caution.

• To correctly identify both new and existing customers, the KYC in insurance should use effective processes.

• Based on the compatibility of the previously acquired information, an insurer will perform the necessary KYC for current clients.

• Anybody who wishes to offer a different address from their Aadhaar address must self-declare the changed information.
  

Judicial Entity/Person KYC Standards

• Insurer should take every reasonable step to identify the client and its beneficial owner when working with judicial people or entities.

• Insurers will also be needed to identify and authenticate their legal status using a range of papers to support information such as name, legal form, and proof of the entity's existence. A registered office address for the company or person; accredited parties claiming to speak for such clients and their beneficial owners.
  

Conclusion

In order to decrease the number of insurance-related scams, KYC in insurance is now a requirement for all policyholders. In such a situation, be sure to get in touch with your insurer and get your car insurance KYC completed as soon as possible if you already have a policy.