Irdai permits insurers to use video-based KYC for onboarding customers

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August 31, 2020 9:09 PM

The Reserve Bank of India has already amended the Know Your Customer (KYC) norms, allowing banks and other lending institutions regulated by it to use video-based customer identification process.

Irdai allows video-based KYCIrdai further said insurers may develop their app and undertake live VBIP, carried out by an authorised person of the insurer, for establishment, continuation or verification of an account-based relationship with an individual customer, after obtaining his informed consent.

Regulator Irdai has permitted life as well general insurers to use the Video-Based Identification Process (VBIP) for prospective customers with a view to enhance the ease of doing KYC and help the insurance sector which is battling the impact of COVID-19 pandemic.

VBIP is a method of customer identification by a representative of the insurer by undertaking real-time, consent-based audio-visual interaction with the customer to obtain identification information, including the required documents, and to ascertain the veracity of the information furnished.

The Reserve Bank of India has already amended the Know Your Customer (KYC) norms, allowing banks and other lending institutions regulated by it to use video-based customer identification process.

In a letter to insurers, Irdai said in order to simplify the process of KYC, it is advisable to leverage the various electronic platforms to make it customer friendly and improve ease of doing business.

“Hence the insurers may use the ‘Video-Based Identification Process (VBIP)’ as an electronic medium, which may further enhance the ease of doing KYC,” it said, adding such process shall be treated as face-to-face process.

The Insurance Regulatory and Development Authority of India (Irdai) further said insurers may develop their app and undertake live VBIP, carried out by an authorised person of the insurer, for establishment, continuation or verification of an account-based relationship with an individual customer, after obtaining his informed consent.

It said authorised person of the insurer performing VBIP for KYC shall record video as well as capture live photograph of the customer present for identification and obtain the identification information.

“The authorised person of the insurer shall ensure that the video is clear and the customer in the video shall be easily recognisable and shall not be covering their face in any manner,” it said, adding that live location of the customer (geotagging) should be captured to ensure that customer is physically present in India.

Also, it should be ensured that photograph of the customer in the Aadhaar matches with the customer undertaking the VBIP and the identification details in Aadhaar shall match with the details provided by the customer.

The letter also said that authorised person of the insurer shall facilitate the process only at the customer end.

The ultimate responsibility for customer due diligence will be with the insurer, it added.

Commenting on Irdai’s move, Santosh Agarwal, CBO-Life Insurance, Policybazaar.com said the prime objective of video-based KYC is to register the customer with the least amount of paperwork and in the shortest possible time possible.

The facility will enable customers to continue to invest in protection products without having to compromise on their personal safety, he said.

“This service will surely turn out to be most beneficial in times like these when all the authorities are advising maximum social distancing,” Agarwal added.

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