Finance minister, P. Chidambaram in the budget said that Know Your Customer (KYC) norms of banks will be sufficient to acquire insurance policies. This will be eligible for both life and general insurance policies.
In other words, a person already holding a bank account will not be require to give any more documents while buying an insurance policy.
Rationale behind this move is that if the customer holds a bank account, it means the person has already submitted his identity and address proof, the key elements to satisfy the rules of KYC norms.
The person will not be asked for any more documents, irrespective of the bank he holds the account in. A customer who wants to buy an insurance policy has to merely submit a certificate from the bank (in which he holds an account), stating he is an existing customer and has satisfied the KYC rules.
Common KYC for banks and insurance policies will help in faster issuance of policies, make the process simple and reduce frauds as well. This will also increase insurance penetration, especially in Tier II and Tier III cities.
However, general insurance companies might insist on a separate KYC in some cases. They might need the potential customer to undergo additional KYC, if their insurance premium exceeds Rs 1 lakh. This can be applicable for fire, marine and householder policies, where premiums are usually on the higher side.
vinay mohanty
In other words, a person already holding a bank account will not be require to give any more documents while buying an insurance policy.
Rationale behind this move is that if the customer holds a bank account, it means the person has already submitted his identity and address proof, the key elements to satisfy the rules of KYC norms.
The person will not be asked for any more documents, irrespective of the bank he holds the account in. A customer who wants to buy an insurance policy has to merely submit a certificate from the bank (in which he holds an account), stating he is an existing customer and has satisfied the KYC rules.
Common KYC for banks and insurance policies will help in faster issuance of policies, make the process simple and reduce frauds as well. This will also increase insurance penetration, especially in Tier II and Tier III cities.
However, general insurance companies might insist on a separate KYC in some cases. They might need the potential customer to undergo additional KYC, if their insurance premium exceeds Rs 1 lakh. This can be applicable for fire, marine and householder policies, where premiums are usually on the higher side.
vinay mohanty
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