IRDAI Chairman Subhas Chandra Khuntia appears to have a plan to lobby the government to allow the use of Aadhaar to make online KNOW YOUR CUSTOMER process easy
The Insurance Regulatory and Development Authority of India intends to use simple KYC so they do not spend too much time on verification. Customers also do not have to wait for too long before they get the product. This is something which will help in achieving that.
Currently, as per Supreme Court order all private companies, including insurers, are barred from asking a person’s Aadhaar number to complete the e-KYC process. The judgement, is considered to have hit banks and online payment platforms last year which were using the Aadhaar number as a single step, low-cost model for furnishing KYC details of their customers.
Besides taking steps to ease the KYC process, Subhas Khuntia also directed insurers to collectively focus on loss reduction by better risk underwriting. This can be achieved by the optimum use of technology for data collection, he said.
Guiding not to gather details of customer behavior on individual basis he suggested that the the insurance regulator must discourage companies from having differential pricing for health and life insurance products based on each individual’s data.
This habit can damage the reputation and goes against the idea of risk pooling in insurance, which allows risk to be spread across a group of people to insure those who suffer loss, damage, illness, or death.