Insurers can conduct video-based KYC, says IRDAI

Insurers can conduct video-based KYC, says IRDAI

New Delhi: Insurance regulator Irdai on Monday (September 21) permitted life and general insurers to conduct KYC of prospective customers through the Video-Based Identification Process (VBIP), a move that will help the company officials to complete mandatory requirement online during the pandemic.

Anand Roy, Managing Director, Star Health and Allied Insurance, said: “The insurance regulator IRDAI has been extremely proactive in making customer services hassle-free since the beginning of the pandemic. The video-Based Identification Process (VBIP) suggested by the IRDAI will not only allow seamless and non-intrusive on-boarding of customers but reduce the turn-around time (T-A-T) significantly. This initiative will help in further enhancing the digitization of the insurance sector.”

Video-Based Identification Process (VBIP) is an alternative (optional) the electronic process of Identification / KYC in paperless form, carried out by the insurer/authorised person (the person authorised by the insurer and specifically trained for face-to-face VBIP) by undertaking seamless, secure, real-time, consent-based audio-visual interaction with the customer/beneficiary to obtain identification information including the necessary KYC documents required for the purpose of client due diligence and to ascertain the veracity of the information furnished by the customer/ beneficiary.

Insurers may undertake live VBIP by developing an application, which will facilitate the KYC process either online or face-to-face in-person verification through video, the regulator said.

“This may be used for establishment/continuation/verification of an account-based relationship or for any other services with an individual customer/beneficiary, as the case may be, after obtaining his/her informed consent…,” Irdai said in a circular.

Roy further said: “With the initiation of the pandemic the demand for health insurance has increased many folds thanks to the awareness of the need for health insurance especially in such times. The VBIP would be extremely beneficial in onboarding customers even in rural hinterlands at a minimum cost thus enhancing the much-needed health insurance penetration in the country.”

It further said all accounts opened or any service provided based on VBIP should be activated only after being subject to proper verification by the insurer to ensure that the integrity of the process is maintained and is beyond doubt.

Also to ensure security, robustness, and end-to-end encryption, the insurers shall carry out software and security audits and validation of the VBIP application as per extant norms before rolling it out and thereafter from time to time.

Irdai also stressed that insurers should take the assistance of latest available technology – including Artificial Intelligence (AI) and face matching technologies – to strengthen and ensure the integrity of the process as well as the confidentiality of the information furnished by the customer/beneficiary.