KYC Mandate And Travel Insurance: All You Need To Know

The Insurance Regulatory and Development Authority of India (IRDAI) has mandated submitting KYC documents to purchase and renew all insurance policies. The new regulations were enacted on January 1, 2023, to protect Indian health and travel insurance providers from fraudulent practices like money laundering and dishonest customers. #

Everything you need to know about the new KYC rule and its significance when purchasing or renewing travel insurance in India is summarised in the piece below.

What Is KYC?

Businesses use the identity-verification procedure known as “KYC,” or “Know Your Customer,” to ensure their customers are who they say they are. The process is used to determine whether a customer poses a risk for engaging in fraudulent activities like money laundering, identity theft, mortgage fraud, etc. 

Financial institutions like banks are typically required by the Know Your Customer procedure to gather and verify the accurate personal information of their customers. These specifics include information like name, address, and government-issued identification numbers like Aadhaar or PAN number. 

What Are The Methods For Obtaining KYC Details That The IRDAI Has Approved?

The IRDAI has published several anti-money laundering guidelines that travel insurance providers can use to evaluate the KYC of clients purchasing travel insurance policies. A few significant touchpoints are listed below: 

  • KYC Identifiers: Travel insurance providers can use KYC identifiers to check a customer’s information using the one-of-a-kind pin generated by the Central KYC Registry.
  • OVDs: The insurer can request official documents from the client to validate the KYC information.
  • Aadhaar Card-Based KYC: The insurance provider can validate information offline or online authentication.
  • Digital KYC: The insurance company can use digital KYC to confirm the personal information of the insured or prospective insured customer by the Prevention of Money Laundering Rules.
  • PAN Card Or Form 60 KYC: The insurance company may verify information by the application requirement using either a PAN Card or Form 60.
  • Video-Based Identification: With the customer’s permission, the insurance company can use video calls to confirm the information the insured has provided. #

What Paperwork Is Needed To Purchase A Travel Insurance Policy?

Beginning on January 1, 2023, customers must give their insurer the following KYC documents to purchase or renew a plan for travel insurance coverage:

  • Aadhar Cards, Voter ID Cards, Passports, Driving Licences, and Ration Cards. 
  • NREGA Job Card with state government employees’ certifications

Please be aware that the documentation requirements for KYC may occasionally change or be updated. As a result, it is suggested that you check the KYC requirements on the insurer’s official website. 

All types of insurance, including life, term, motor, and travel insurance, now require a KYC check. A KYC check in your plan will confirm that neither the insurer nor the insured suffer the consequences of fraudulent activities, whether you purchase a new plan or have your current policy renewed. Even though the KYC ruling is currently in effect, the scheme may still undergo some changes at any time. If you want to explore the cost of insurance, you can utilise a travel insurance premium calculator.

#Visit the official website of IRDAI for further details.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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