Starting January 1, 2023, the Insurance Regulatory and Development Authority of India (IRDAI) requires KYC procedures for all motor insurance, including car insurance, to boost security, curb fraud, and strengthen KYC standards. #
Understanding KYC: What Is It?
KYC, or Know Your Customer, is a mandatory process in India for all motor insurance policies, including car insurance, per IRDAI guidelines. It verifies a customer’s identity by gathering and confirming personal information like name, address, and proof of identity to prevent fraud and ensure robust KYC practices. #
Navigating KYC Requirements For Car Insurance
The KYC regulation aims to identify and prevent insurance-related crimes, including money laundering. As of January 1, 2023, all new or existing policies must undergo KYC procedures per IRDAI guidelines. #
KYC Requirements For Specific Policyholders
- Identity Verification: Insurers must thoroughly confirm and authenticate the customer’s identity.
- Preventing Fake Registrations: Insurance companies must ensure policies are not registered under fake or anonymous names.
- Unique Processes: Insurers must have unique processes to identify new and existing clients.
- Verification of Information: Insurance providers must confirm a policyholder’s name, address, and photo.
- Address Declaration: If a policyholder provides an address different from their Aadhar card, insurers must request a “self-declaration.”
- Special Cases: Customers unable to authenticate their Aadhaar may need to provide Officially Valid Documents (OVD).
KYC Regulations For Entities And Individuals
- Identity Confirmation: Insurers must take necessary steps to determine the identity of the client and its beneficial owner.
- Documentation For Legal Status: Insurance companies must utilise documentation to confirm the legal status of entities or individuals.
- Information Required: This includes name, legal form, evidence of existence, location of registered office, and individuals with authorisation.
IRDAI Approved KYC Methods
- Online KYC Authentication (Aadhaar): Using Aadhaar for KYC, customers can provide their Aadhaar number and undergo biometric authentication.
- Offline KYC Authentication: Physical documents, such as identification and proof of address copies, can be submitted with the KYC application form.
- Video-Based Identity Authentication: KYC information is provided over a video call.
- PAN-Based KYC Authentication: Identity verification using the Permanent Account Number (PAN) method, requiring a self-attested copy of the PAN and additional proof of address documents.
- OTP-Based E-KYC: Completing the process using the One Time Password (OTP) sent to the registered mobile number.
Documentation Required For KYC
- Proof Of Identity: Voter ID, passport, Aadhaar card, utility bills, etc.
- Proof Of Address: Rent agreement, utility bill, bank statement, etc.
- Image: A recent passport-sized photograph.
- Additional Records: As specified by the vehicle insurance
Impact Of IRDAI KYC Requirements On Insurers And Policyholders
- Faster Claim Settlement: Quicker settlement of claims as insurers do not need to request KYC when a policyholder files a claim.
- Fraud Prevention: Enhanced control over frauds like money laundering and identification of specific individuals.
- Customer Satisfaction: Due to streamlined processes, insurance companies can increase client satisfaction and attract new business.
The IRDAI’s KYC regulations for motor insurance usher in a new era of enhanced security, reduced fraud, and improved efficiency for insurers and policyholders. You can use a vehicle insurance calculator to check on the prices of insurance. *
*Standard T&C Apply
#Visit the official website of IRDAI for further details.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.