What is KYC?
When creating a digital account, KYC is the process of authenticating the customer’s identification. It entails gathering and confirming private data, including name, address, and identity papers.
In India, even for auto insurance, KYC is required for all plans. The IRDAI rules are designed to bolster the KYC standards in the auto insurance sector and guard against fraud.
Understanding KYC norms in auto insurance
The goal of the rule requiring KYC for all clients when buying a new insurance policy is to identify and lessen the effects of insurance-related crimes like money laundering.
Every insurer must follow certain KYC rules established by the IRDAI while conducting the KYC procedure for both people and judicial persons. As a result, starting on January 1, 2023, all insurance purchased must adhere to KYC standards.
KYC guidelines for individual policyholders
Here are the KYC norms for individual policyholders.
- The customer’s identification must be confirmed and authenticated by the insurer at all costs.
- Insurance companies must use extra caution to make sure that a policy is not issued under a false or anonymous identity.
- Insurance companies must make sure that unique processes are in place to recognise both new and current clients.
- Insurance providers are required to confirm a customer’s name, address, and most current photo.
- When a consumer wishes to provide a different address than what is listed on their Aadhaar card, insurers must request a “self-declaration.”
- Insurance companies may request Officially Valid Documents (OVD) from clients who are unable to validate their Aadhaar owing to a sickness, accident, advanced age, or other reason.
KYC accepted by the IRDAI
Here are the various ways you can submit KYC for insurance policies.
Online Aadhaar-based KYC authentication: Aadhaar will be used during this procedure for KYC requirements. To finish the KYC procedure, you can supply your Aadhaar number and a biometric authentication method.
Offline-based KYC authentication: For the purposes of KYC, this method uses tangible papers. Along with the KYC application form, you can provide copies of your identification verification and address proof.
Video-based identity authentication: Your KYC information must be provided to the insurance firm via a video chat as part of this process.
OTP-based e-KYC: Utilising the One Time Password (OTP) issued to your registered cellphone number is required for this operation. To validate your identity, you must input the OTP in the e-KYC form.
Documents required for KYC of individual customers
Here is the list of accepted documents to complete the KYC process for insurance policies.
- Identity proof: Voter ID, Aadhaar card, passport, utility bills, etc.
- Address proof: Bank statement, utility bill, rental agreement, etc.
- Photograph: Recent passport-size photograph
- Other documents: As required by the insurer
