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IRDAI has also said that policy proposal forms do not need wet signatures.
The Insurance Regulatory and Development Authority (IRDAI) has now allowed general insurance policies to be issued in an electronic format till March 31, 2021. This is applicable to policies issued to individuals as also certain miscellaneous products.
This exemption has been given considering the pandemic since there is a lockdown due to the coronavirus outbreak. Wet signatures will also not be required and consent to a policy proposal will be given through a one-time password sent to the customer's email id and mobile phone.
The IRDAI has said that electronic policies can be issued for fire insurance, motor insurance, package policies and all miscellaneous policies issued to individuals where the sum insured does not exceed Rs 5 crore.
"Issuing electronic policies is definitely a positive step considering the current pandemic situation and the challenges in issuing physical policy documents or proposal forms. This not only improves the turnaround time for policy issuance, but also secures the policy documents electronically with the policyholder as well as the insurer," said Gurdeep Singh Batra, Head - Retail Underwriting, Bajaj Allianz General Insurance
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IRDAI has said that insurers can send the digital policy to the registered e-mail id or mobile number provided by the customer only on the specific consent provided by the policyholder.
But, if a policyholder explicitly seeks a physical document, the same has to be sent by post.
In August, IRDAI had allowed term insurance policies to be issued electronically.