Beginning on January 1st 2023, all motor insurance sectors, including auto insurance, will be required to
adhere to KYC (Know Your Customer) processes. Digital KYC, Aadhaar-based KYC, CKYC, and Video KYC
are all required by IRDAI as acceptable methods of carrying out this procedure.
Knowing the KYC Standards
Due to a surge in insurance-related crimes including money laundering, all auto insurance firms will be
required to compel every policyholder to undergo a KYC (Know Your Customer) check.
Every insurer must adhere to various KYC criteria established by the IRDAI while conducting KYC
processes for both people and judicial persons. They are as follows:
KYC Standards for People
- Insurance companies should take all reasonable steps to confirm the clients’ real identities.
- Insurers should take extra care to ensure that no contract is under a false or anonymous identity.
- The insurance should employ efficient systems to accurately identify both new and current consumers.
- Identity evidence, address verification, and a current photo are requirements for valid identification.
- An insurer will complete the necessary KYC for current clients based on the suitability of the information already collected.
- When someone wishes to provide an address that is different from their Aadhaar address, they are making a self-declaration.
- Official records of people who, for reasons related to age, accident, disease, or another factor, cannot undergo verification.
Judicial Entity/Person KYC Standards
- Insurance companies must use all commercially reasonable efforts to locate the customer and its beneficial owner when dealing with judicial people or entities.
- Additionally, insurers will need to identify and confirm their legal status using a variety of papers to support information like:
- Name, legal form, and evidence of the entity’s existence
- powers to control the specific client
- Address of the organization’s or individual’s registered office
- Authorized people who assert to be speaking for such clients and their beneficial owners.
IRDAI Accepts KYC Practices
The insurer must use the following KYC procedures, per IRDAI regulations. A provider of auto insurance may carry out any of the following KYC processes:
- Aadhaar-Based KYC: Both online and offline verification methods can be used to complete this KYC process.
- Digital KYC: in accordance with anti-money-laundering regulations.
- Video-Based Identification: An electronic, paperless method of identification.
- By KYC Identifier: A special number that the Central KYC Records Registry assigns to the customer.
- OVD: Using legally recognized papers, and
- PAN card or Form 60, if appropriate, along with any further paperwork the insurer may want.
Documents Needed for Individuals’ KYC
The following are the legally acceptable papers needed for the persons’ KYC:
- Driving Permit
- ID Card, Aadhaar
- NREGA Card properly signed by a State Government officer
- I.D. Card
- a letter from the National Population Register with a name and address on it.
- voter identification card