/ August 19, 2019
The process of converting a physical certificate or document into an electronic book is called Dematerialization. In the era of Digital, it is imperative that securities are no longer in a physical mode, but are registered and transferred electronically.
On September 16, 2013, the then Finance Minister- P Chidambaram, launched the IRDAIs - Insurance Repository System (IRS). This system was aimed to insure green initiatives, transparency in all insurance-related work and lower management cost for the insurers. It was also aimed to bring down the total operational cost by eliminating the need for printing and dispatching documents, and sending the documents to receiver’s repository account electronically.
The IRS system allots a unique ID to every individual, and all the insurance policies of that individual, life as well as non-life, come under the unique ID. IRS maintains all policy-holder data, such as history of claim, names of the beneficiaries, assignees and nominees.
This concept may be new to some, and may not be utilized widely. However, Dematerialization of Insurance Policies through IRS has several benefits. To list a few,
An insurance policyholder can follow these steps to open an insurance Dmat account:
The Repository system is still in the formative stage. Initially, IRDAI had given the license to only five companies to form an IRS system. These companies were NSDL, CIRL, SHCIL projects Ltd., CAMS Repository Services Ltd. and Karvy Insurance Repository Ltd. As of now, not all insurance companies have opened their accounts with all repositories. However, the Government is closely monitoring the system and trying to make the dematerialization system efficient and affordable for policyholders.