What Is KYC?
KYC is the standard process for verifying a customer’s identity when opening a digital account, involving collecting and verifying personal information and identification documents. In India, KYC is mandatory for all insurance policies, including car insurance, and the Insurance Regulatory and Development Authority of India (IRDAI) guidelines aim to strengthen KYC standards in the car insurance sector to prevent fraudulent activities. #
Knowing KYC Requirements For Car Insurance
The government has mandated KYC for all new vehicle insurance policies to combat insurance-related crimes like money laundering. Insurers must adhere to the IRDAI’s KYC guidelines for individuals and legal entities, with full compliance starting from January 1, 2023. #
KYC Guidelines For Individual Policyholders
The KYC requirements for policyholders are listed below:
- Insurers must try to confirm and authenticate the customer’s identity.
- Insurers must carefully check the existence of an anonymous or fictitious name on a policy.
- Third-party liability insurance companies need to ensure that distinct processes are in place to recognise potential and current clients.
- Insurance companies must verify a customer’s identity, address, and most recent photo.
- When a customer requests to submit an address other than the one listed on their Aadhaar card, insurers must request a “self-declaration.”
- Customers who cannot authenticate their Aadhaar due to an injury, illness, advanced age, or other reasons may be asked to provide Officially Valid Documents (OVD).
Individuals may find it helpful to use a car insurance calculator to estimate their insurance premiums more accurately.
KYC Guidelines For Judicial Persons/Entity
These are the KYC requirements for a judicial entity or individual:
- Insurance companies must take every precaution to confirm the client’s identity and that of its beneficial owner.
- Through the documents listed below, insurers must confirm their legal standing.
- Name, evidence of existence, and the entity’s or person’s legal form.
- The location of the organisation or person’s registered office.
- Authorised persons who assert to be personally liable for such clients and their beneficial owners.
KYC Accepted By The IRDAI
Here are the different methods for submitting KYC for insurance policies.
- Online Aadhaar-Based KYC Authentication: Aadhaar is used in this procedure for KYC requirements. The KYC process can be finished by providing your Aadhaar number and a biometric authentication method.
- Offline-Based KYC Authentication: Using physical documents for KYC purposes is part of the offline-based KYC authentication process. The KYC application form allows you to attach copies of your identity proof and address proof.
- Video-Based Identity Authentication: Video-based identity authentication requires you to call the third-party liability insurance company and give the company your KYC information.
- KYC Authentication Based On The Permanent Account Number (PAN): During this process, your PAN must be provided to verify your identity. You must submit a copy of your PAN that has been self-attested. Additionally, you must provide documents proving your address, like a voter ID, a passport, utility bills, etc.
- One Time Password (OTP)-Based E-KYC: This procedure uses the OTP sent to your registered mobile number. For the e-KYC form to authenticate your identity, you must enter the OTP.
When processing a motor insurance claim, adherence to proper KYC procedures is a key element in ensuring transparency and preventing fraudulent activities.
#Visit the official website of IRDAI for further details.
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