How Does Video Based KYC Work For Term Insurance Plans?
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The comprehensive process of filling out the physical proposal forms, getting signatures on them, and subsequent transfer of such physical papers have been significantly hampered by the Covid-19 outbreak. This is why the Insurance Regulatory and Development Authority of India (IRDAI) has approved the use of video-based identification processes (VBIP) by life, general, and health insurance providers. Let's understand how the process works.
How Does Video Based KYC Work For Term Insurance Plans?
Video-based identification processes (VBIP) is an optional, electronic technique of identifying customers as part of the know-your-customer (KYC) procedure. Its purpose is to make it easier for insurers or their authorised people to collect information, such as KYC documents. The insurance company's authorised person doing the VBIP for KYC will record the video, take pictures of the applicant present for identification, and get the identification information using the Aadhaar Card. Moreover, to ensure that the applicant is physically present in India, the live location or geotagging will be recorded.
The insurance company's authorised officer should confirm that the video is clear so that the applicant in the video can be identified immediately and that the face is not masked in any way. Individuals can be onboarded remotely and conveniently using the video-based KYC method. Moreover, insurers can cut expenses while expanding their service industry's reach, penetration, and efficiency.
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According to the Prevention of Money Laundering Act, insurers must ensure that the video footage includes a date and time stamp and is maintained safely and securely. So, before deploying the VBIP application, insurers must conduct a software and security audit and validation to assure security, functionality, and end-to-end encryption. The audio-visual engagement will have to be initiated by insurers, and it can never be outsourced to third-party service providers. The VBIP process is carried out by authorised individuals who have been specifically trained for this purpose. Moreover, the activity record and the credentials of the official performing the VBIP have to be kept.
What is the Benefit of Video Based KYC?
The implementation of video-based KYC has made the overall process relatively easy and swift. Now, you can get the completed proposal form as an email or a message with a link to your registered email ID or phone number. You can confirm your consent by clicking the confirmation link or validating the one-time password. However, all such plans will require insurers to conduct pre-verification calls. Moreover, to address the challenges faced by corporations in printing and dispatching policy documents, IRDAI has also permitted life insurers to offer electronic or e-policies to policyholders on their email IDs during the current financial year.
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Take Away
For the development, maintenance, and authentication of an account-based relationship with the policyholders, insurance firms have to design their own apps and appoint personnel to undertake live VBIP. This way, the insurance providers can easily verify the accuracy of the information provided by the applicant and determine whether a life insurance policy should be issued to him/her.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
