Travel Insurance

KYC For Travel Insurance: All You Need To Know

Until January 1, 2023, Know Your Customer (KYC) was optional for consumers purchasing general insurance. However, in August 2022, the Insurance Regulatory & Development Authority of India (IRDAI) mandated KYC to safeguard the insurance industry against money laundering and fraudulent activities. This regulation now applies to all travel insurance online providers in India, requiring clients to complete a KYC form. # *

By implementing KYC, insurance companies aim to distinguish legitimate users from scammers, enhancing the security of insurance benefits. Additionally, KYC assists insurers in assessing clients’ risk profiles, allowing them to set prices based on the market’s low-, medium-, and high-risk segments.

The comprehensive customer databases established through KYC checks expedite and streamline claim settlements. With vital customer records on file, it is anticipated that KYC may be optional during the claim procedure.

Approved KYC Procedures For Travel Insurance Customers

According to IRDAI guidelines on Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT), insurers have various options for performing KYC checks on travel insurance online clients:

  • KYC Using An Aadhaar Card: An offline or online authentication procedure can be used for this.
  • KYC Digitally: In compliance with the Prevention of Money Laundering (PML) Regulations
  • Identification Process Based On Videos: This is a consent-based customer identification system, also known as VBIP
  • KYC Identifier: Using the distinct pin that the customer’s CKYCR (Central KYC Registry) 
  • Ovds Issued: By giving the insurer officially recognised documentation, such as a Form 60 or PAN Card: Whichever is applicable can be used. #

KYC Documents Required to Purchase Travel Insurance

Accepted KYC documents for purchasing travel insurance include:

  • Voter ID cards, Aadhaar cards, passports, driving licenses, ration cards with address and photo, and NRG employment cards.
  • A letter from the National Population Register with demographic information.
  • Other documents specified by the central government in consultation with IRDAI.
  • It’s essential to review the list of approved documents, as identity and address proof requirements may vary.

Read more about – Documents Are Required For Passport In India

Mandatory KYC Guidelines For Travel Insurance Companies

IRDAI has mandated several KYC guidelines for international travel insurance providers in India:

  • Verify the true identity of clients to the best of their abilities.
  • Establish efficient procedures for obtaining accurate client information for identification purposes.
  • Ensure no policies are issued under false or anonymous names.
  • Confirm the identity, address, and recent photo of clients.
  • Verify the identity of both the customer and beneficial owner for legal persons.
  • Validate the legal status of juridical persons using appropriate documents.
  • Confirm the authorization of individuals claiming to represent legal entities.
  • Obtain self-declarations from clients providing a different address from Aadhaar.
  • Verify officially valid documents for clients unable to authenticate Aadhaar for legitimate reasons.
  • Gather relevant client data from various sources, including agents.
  • Ensure that client premiums are proportionate to their income.
  • File a Suspicious Transaction Report (STR) with the Financial Intelligence Unit-India (FIU-IND) if issues with client identity or transactions arise.
  • In conclusion, KYC checks are now mandatory for all insurance policies in India. Clients must prepare the necessary documentation when purchasing or renewing insurance plans. Familiarizing oneself with the KYC document list before obtaining subsequent travel insurance policies is crucial.

* Standard T&C Apply

# Visit the official website of IRDAI for further details.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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