Calcutta, Dec. 8: The insurance repository system, which allows a policyholder to hold his policy in demat (electronic) form, will take at least a couple of years to emerge as a significant business channel for insurers.
Finance minister P. Chidamba-ram had inaugurated the system in September. The Insurance Regulatory and Development Authority has appointed five firms — NSDL Database Management Ltd, Central Insurance Repository Ltd, SHCIL Projects Ltd, Karvy Insurance Repository Ltd, and CAMS Repository Services Ltd — to act as repositories. These firms will function as a single point of service for all forms of electronic insurance policies.
Atanu Sen, managing director of SBI Life Insurance, said the system could lower administrative costs but would take more time to gain prominence as the technical platform was being developed by the repositories.
“It will take some time because the system has to be in place. There are five repositories and their systems need to be in alignment. The companies are working on it. Once that is done, the administrative costs will go down substantially and the customer will have a transparent view of what he is buying and what he holds in his portfolio,” Sen said on the sidelines of Infocom 2013, an ABP Group initiative.
“The Life Insurance Council has taken everyone’s view. May be by December 2014, we would see some more activity and by the next financial year, it will be a reality.”
Policies in a demat form is advantageous as a policyholder can view all his existing policies and buy new ones at one place by opening a free account with the repository.