IRDAI makes Aadhaar and PAN link mandatory for all insurance policies
09 Nov 2017
After bank accounts and mobile SIM cards, Aadhaar ID has now been made mandatory for insurance policies as well. The Insurance Regulatory and Development Authority of India (IRDAI) has directed insurance providers to link all individual policies with Aadhaar.
The central government had, on 1 June 2017, notified the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017, making Aaadhar and PAN/Form 60 mandatory for availing financial services, including insurance.
"These rules have statutory force and, as such, life and general insurers (including standalone health insurers) have to implement them without awaiting further instructions," said IRDAI in a circular.
However, IRDAI has not given a deadline for the linkage.
Last month, IRDAI had said that authentication of policyholders or clients by insurance companies using Aadhaar number will be on a voluntary basis and with their consent.
The regulator has now taken a decision to make it mandatory to quote Aadhaar while buying a new policy. For existing policies, Aadhaar can be ceded at time of payment of renewal premium.
The circular states that the directives have statutory force and, as such, life and general insurers have to implement it without waiting for further instructions. Some life insurers are interpreting immediate effect to mean that no payout can be possible without Aadhaar and PAN number.
Life insurers are already barred from settling claims in cash. Claim amounts are transferred only to bank accounts, which now have to be linked to Aadhaar. Many insurers already ask for PAN for all life policies although the regulator requires them for cash premium above Rs50,000.
The process of linking Aadhaar to policies would be similar to the one adopted by banks. This means that insurers would be able to link the numbers either through text messages or online or by visiting the branch.
