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According to a note by the IRDA, the insurance repository system to be set up by the regulator will be the first of its kind in the world.
The insurance regulator recently said insurers could enter into agreements with one or more repositories.
According to IRDA, the objective of creating an insurance repository is to provide policyholders a facility to keep insurance policies in electronic form.
India’s over $40 billion insurance market is a lucrative destination for foreign insurance companies as well, although a lion’s share of 75% of market share is currently held by state-owned Life Insurance Corporation (LIC) of India.
The proposal to increase foreign direct investment (FDI) cap in insurance from 26 per cent to 49 per cent is yet to be debated in the Indian parliament.
Meanwhile the insurance regulator has recently said five companies have been given the status of insurance repositories and provided with a licence that will be valid till July 31, 2014.
Insurance repository would give policyholders a facility to keep insurance policies in electronic form and to undertake changes in the insurance policy with speed and accuracy in order to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies.
The repository will issue a unique code number to all policy holders, and policies of those persons will come under that number. It maintains the history of the policy details such as claims, nominees, beneficiaries and other data.
Life insurance penetration in India is about 4.4 percent of the country’s gross domestic product in terms of total premiums underwritten annually, according to the insurance regulator.