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MUMBAI: With anti-money laundering guidelines becoming applicable to health insurance and non-life companies with effect from January 1, 2023, agents in smaller towns are facing new challenges.
According to distributors, many smaller buyers of motor covers do not have the mandatory PAN numbers and are not able to buy or renew their policies. Agents are also complaining that all companies systems have not been updated and there are issues in processing insurance proposals.
According to Jasbir Singh Uppal an insurance distributor in Ajmer said that he had faced multiple issues. The problems include rural customers not having the mandatory PAN card. Also, in rural areas there are many instances of the vehicle owner name not matching with the name in the PAN card. “The IT system of the insurance companies do not accept the proposal without the PAN card or if there is a name mismatch,” said Uppal. IRDAI rules allow for acceptance of Form 60 in lieu of the PAN Card. However, most insurance companies onboard customers digitally and have not made any provision for accepting proposals without PAN.
“The regulation should have been limited to Aadhaar without insisting on PAN,” said Uppal. He added that if rural vehicle owners are not allowed to buy vehicle insurance without PAN the number of uninsured vehicles on Indian roads would rise. It is estimated that around half of the vehicles on Indian roads are uninsured.
“There was a problem in accepting proposals until mid-January as systems had to be updated. This has been sorted now. But with PAN cards being made mandatory some proposals could be accepted,” said Sandeep Jangir and insurance agent in Rajgarh. He adds that while the insurance company have asked distributors to get cKYC of customers, many of the smaller proposers are not even aware of the central KYC.
Insurance companies are supporting the move to gather more data for ensuring KYC and do not see it impacting business. “The KYC compliance mandate is a positive and critical move by the IRDAI, something that the industry has been pushing for a long time now,” said Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance.
According to Singhel who is the chairman of CII committee on insurance and pensions, KYC has always been mandatory across all financial products like banking, life insurance, investments. “This will bring in more transparency, help develop a better understanding of customers, and at the same time fine-tune product offerings for them in the short and long run. It will play a major role in curbing fraud, and money laundering, thus increasing overall trust in the sector,” he added.
According to distributors, many smaller buyers of motor covers do not have the mandatory PAN numbers and are not able to buy or renew their policies. Agents are also complaining that all companies systems have not been updated and there are issues in processing insurance proposals.
According to Jasbir Singh Uppal an insurance distributor in Ajmer said that he had faced multiple issues. The problems include rural customers not having the mandatory PAN card. Also, in rural areas there are many instances of the vehicle owner name not matching with the name in the PAN card. “The IT system of the insurance companies do not accept the proposal without the PAN card or if there is a name mismatch,” said Uppal. IRDAI rules allow for acceptance of Form 60 in lieu of the PAN Card. However, most insurance companies onboard customers digitally and have not made any provision for accepting proposals without PAN.
“The regulation should have been limited to Aadhaar without insisting on PAN,” said Uppal. He added that if rural vehicle owners are not allowed to buy vehicle insurance without PAN the number of uninsured vehicles on Indian roads would rise. It is estimated that around half of the vehicles on Indian roads are uninsured.
“There was a problem in accepting proposals until mid-January as systems had to be updated. This has been sorted now. But with PAN cards being made mandatory some proposals could be accepted,” said Sandeep Jangir and insurance agent in Rajgarh. He adds that while the insurance company have asked distributors to get cKYC of customers, many of the smaller proposers are not even aware of the central KYC.
Insurance companies are supporting the move to gather more data for ensuring KYC and do not see it impacting business. “The KYC compliance mandate is a positive and critical move by the IRDAI, something that the industry has been pushing for a long time now,” said Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance.
According to Singhel who is the chairman of CII committee on insurance and pensions, KYC has always been mandatory across all financial products like banking, life insurance, investments. “This will bring in more transparency, help develop a better understanding of customers, and at the same time fine-tune product offerings for them in the short and long run. It will play a major role in curbing fraud, and money laundering, thus increasing overall trust in the sector,” he added.
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