KYC Process in Two-Wheeler Insurance
Updated On Feb 15, 2023
KYC Process in Two-Wheeler Insurance
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With the rise of fraud in India, banks and other financial institutions regularly revise their strategies to prevent it. Earlier in the year 2004, the Reserve Bank of India made it mandatory for all financial institutions to verify the identity and residence of all their customers. Similar to the above, the Insurance Regulatory and Development Authority of India (IRDAI) has made it compulsory for all bike insurance companies to follow the KYC process before issuing an insurance plan. Read on to know more about the KYC process in two-wheeler insurance.
What is KYC in Two-Wheeler Insurance?
Recent master guidelines on anti-money laundering and counter-financing of terrorism were released by the Insurance Regulatory and Development Authority of India (IRDAI). Therefore, all bike insurance companies must undergo a customer identification process before issuing or renewing any insurance plan. This process will help the insurers know about the worthiness of policyholders, which will be beneficial at the time of the claim settlement process.
What is the KYC Process in Two-Wheeler Insurance?
Listed below are numerous methods by which an insurance company can follow the KYC process for two-wheeler insurance.
- Aadhar-Based KYC: An individual can do their KYC either online or offline.
- Video-Based KYC: The insurance company and policyholder will interact face-to-face through any third-party video call apps.
- CKYC: The insurance company may also verify your authority through a unique Central Know Your Customer (KYC) number.
- Through PAN or Form 60: An individual can submit their official, valid documents along with their PAN or Form 60.
- Digital KYC: Depending on the rules of Prevention of Money Laundering.
What Documents Are Required For KYC?
Here’s a list of documents required by an individual for the KYC process.
- Aadhaar Card
- Driving License
- Voter ID card issued by the election commission
- Ration card with applicant’s photograph
- ECHS (Ex-servicemen contributory health scheme) or CGHS (Central Government Health Scheme) card
In the case of KYC for bike insurance in rural areas, the following documents are required.
- Gram Panchayat Residential Certificate issued by the village panchayat head.
- Income tax PAN card
- Caste and domicile certificate with photo issued by the state government
- Certificate of address having photo issued by MP/MLA or Group- A Gazetted office on the letterhead
- Kisaan passbook with attached photo
- MGNREGA card
- Two-wheeler registration certificate
- Telephone bill/ mobile postpaid bill of previous three months
KYC Norms For Bike Insurance Companies
The norms for two-wheeler insurance companies are to be followed by both individuals and juridical people are outlined below.
KYC Norms For Individuals
- Bike insurance companies must know the personal details of applicants to confirm the authenticity of new and existing customers.
- Each policyholder must submit identity proof, address proof, and a recent passport-size photograph to buy two-wheeler insurance.
- If any individual wants to submit any other address that is mentioned in the Aadhar card, then self-declaration is a must.
- Anyone who was not able to undergo the KYC process should submit their official valid documents to the insurance company.
- Existing policyholders may have to follow the KYC process. However, the time frame is two years for low-risk policyholders and one year for high-risk individuals.
KYC Norms For Juridical Person
- Individuals must provide the address of their registered office.
- Company name, legal form, and proof of existence must be provided.
- Power of regulating authority of the corporation.
- An authorized representative working on behalf of the juridical client.
- Identification of the juridical beneficial owner.
Time and again, IRDAI keeps on regulating the terms and conditions for buying bike insurance policies. According to the recent announcement, starting from January 1, 2023, all insurance companies must undergo the verification process. These master guidelines are introduced to avoid any fraud happening in the insurance sector.
Also Read: Is Paperwork Required When Buying a Bike?