IRDA has licensed the National Securities Depository Limited (NSDL), Central Depository Services Limited (CDSL), Stock Holding Corporation of India, Karvy Group and Computer Age Management (CAMS) Repository Services to act as repositories for insurance policies in its board meeting on Wednesday. But it will take a year for customers to finally hold the insurance in a demat form.
The repositories have decided to keep a uniform fee structure for this service. “We do not want any competition among repositories at the initial stage, so we will be offering uniform fees to the life insurers,” said a senior official of one of the repositories.
This move will help both the insurers and policyholders. While the insurers will be able to cut down costs, policyholders will be able to maintain insurance policies in electronic form and make changes, modifications and revisions to them. Policyholders will not be levied any charges for using such facilities as the insurance repositories will be paid directly by the insurance companies.
“Dematerialization of policies will reduce our workload. Customers will not be in trouble if they lose their policy,” says Pradip Agarwal, MDRT member from Kolkata.