Buying new life, health or motor insurance policy? Know if physical certificate is mandatory or not in 2021


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Certificate of Insurance rules in India 2021: Replying to a question on whether the Government is considering providing e-insurance certificates instead of issuing insurance Bonds, Union Minister of State for Finance Anurag Thakur recently informed Rajya Sabha that the insurer has to issue both physical and electronic insurance certificates to policyholders as per IRDAI rules. However, due to the COVID-19 pandemic, insurers were allowed to issue electronic policy documents only till March 31, 2021, as an interim measure.

From April 1 onwards, the insurance companies will have to send insurance policies in physical form to policyholders, depending on the consent of the policyholder.

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“The Insurance Regulatory and Development Authority of India (IRDAI) has informed that regulation 4 of IRDAI (issuance of e-insurance policies) Regulations, 2016 stipulates that every insurer shall issue electronic Insurance policy based on specified premium or sum insured. However, these electronic policies are also required to be issued in physical form as well, except when these are issued through registered insurance repositories,” said Thakur.

“Recently, in view of the COVID-19 pandemic as a special case, IRDAI has allowed insurers to issue only electronic policy documents and exempted them from the requirement of sending insurance policies in physical form till 31st March 2021, subject to the consent of the policyholder. The exemption provided by IRDAI is an interim measure due to the COVID-19 pandemic,” he added.

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In the context of Thakur’s statement in the Rajya Sabha on the issuance of insurance certificates to policyholders, here’s a deep dive into the exact IRDAI rules in this regard.

What is the certificate of insurance?

A certificate of insurance (COI) is issued by an insurance company and verifies the existence of an insurance policy. It is vital that the client checks the policy coverage dates and the limits of the policy. Certificates of insurance contain separate sections for different types of liability coverages.

What are the IRDAI rules for issuing insurance certificates to the insured?

Neeraj Prakash, Managing Director, Shriram General Insurance, told FE Online, “Regulation No. 4 (iii) of the IRDAI (Issuance of e-Insurance Policies) Regulations, 2016 provides that all policies issued in electronic form by the Insurer directly to the policyholder shall also be issued in physical form. In all such cases, copies of the proposal form, etc shall also be sent in physical form.”

Casparus Kromhout, MD & CEO, Shriram Life Insurance, says the certificate of insurance is needed in group insurance cases.

“Group insurance is an insurance policy that is taken by a pre-defined group of people that have come together with a common purpose and a common economic activity. In these cases the insurance contract is between the Insurance Company and the Group; and a master policy is issued to the manager of the group and will be in the name of the group. Thus individual policy documents are not issued for the group members; but in lieu of that IRDAI specifies that the Insurer should issue insurance certificates or Certificates of insurance (CoI) to the group members in case of a non-employer-employee group policy,” the Shriram Life Insurance CEO told FE Online.

“These certificates contain the benefits of the insurance cover provided along with the terms and conditions. The certificates are also required to contain the procedure to file for a claim if needed and the contact details of the insurer,” he added.

Can an insurance certificate be issued online only?

Certificate of Insurance can be issued in the Physical or an online format. They need to be provided to the Master Policy Holder (the manager of the group) and are distributed by them to the group member, said Casparus Kromhout.

Neeraj Prakash said that mostly Policy/Certificate is issued online to facilitate the insured for any urgency, with the convenience of providing hard copy of the document. However, Electronic Insurance Policies are issued with digital signature in accordance with applicable provisions prescribed by law. “Wherever policyholders demand the physical version of the policy document, the same is made available. And wherever it is not possible to send the policy documents through electronic means due to any reason, there also insurers necessarily forward the physical documents to the policyholders,” he said.

Is it compulsory for companies to issue physical as well as online insurance certificates?

The physical form of the electronic Insurance Policy is a replica of the electronic form. According to Prakash, the physical version of the electronic insurance policies need not be issued when electronic insurance policies are issued through the platform of registered Insurance Repositories. Similarly, copies of the proposal form etc are also sent in electronic form to the insured along-with electronic insurance policies. Electronic insurance policy is issued by the Insurers either directly to the policyholders or through the registered Insurance Repositories.

Recently in the wake of Covid-19 pandemic, the Regulator granted the exemption to insurers from the requirement of (a) issuing policy documents and (b) copy of the proposal in physical form in certain cases. However, as per Rule 141 of Central Motor Vehicle Rules 1989, a certificate of Insurance is to be issued only in Form 51. It is only in Motor Vehicle Insurance, apart from the policy, that a separate certificate of insurance is required to be issued by insurers. This document is always required to be carried in the vehicle.

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