Insurance Development and Regulatory Authority of Bangladesh (IDRA) has introduced a digital e-receipt service aimed at putting an end to the issuance of handwritten or printed paper receipts issued by insurance companies against premium received from their respective policyholders.
The IDRA thus banned handwritten or printed receipts in case of collecting money and premium of insurance companies introducing the e-receipt, prepared by Unified Messaging Platform or UMP.
A circular was issued in this regard by IDRA on Monday which said the new system will come into effect on October 1 next. However, from June 1 to September 30, both the systems will be allowed.
This circular has stated that beginning June 01, 2021 the insurance companies should provide policyholders with paper receipts along with UMP generated e-receipts (original receipt or OR, renewal receipt or RR, and money receipt or MR) in order to bring about a transparent and accountable insurance sector comprising of innovative digital services for insurers and policyholders alike, to substantially reduce the postal or courier service cost incurred by insurers in association with making paper premium receipts available to policyholders, to address any potential dispute arising from paper premium receipts, to ensure accurate collection of government tax revenue, to stop embezzlement of premium and subsequent benefits, to reduce policyholder harassment, to instill policyholder trust, and to contribute to the overall digitization of the insurance industry.
Market operators said the newly-introduced digital system is a welcome move in the insurance sector, often seen as a simile for malpractices and unethical businesses.
" It is another step of insurance digitalization and the new system will help end evasion of tax in government coffer, end of cheating innocent clients and above all restore the confidence of all stakeholders in the insurance sector," a high official of IDRA told the FE on Tuesday.
It will ensure transparency in the insurance sector boosting customer rights and confidence.
Approximately more than 10 million policy holders of both life and non-life insurance companies will be directly benefitted by implementation of the new system.
According to the information, insurance companies collect policies through the field level agents.
But customers are outrageously victimized by various harassment, including non-payment of premiums, misappropriating customer's money, dropping insurance policy, non-payment of claims and causing so many complications due to insufficient data infrastructure.
''The latest IDRA move is aimed at cracking the whip on the unethical business practices over the years," an industry insider said.
UMP has been playing an important role in digitizing insurance sector of the country. Information of all clients of 78 insurance companies of Bangladesh are kept here as a digital policy repository which is a digital backbone in the industry.
Starting October 01, 2012 the insurance companies must provide UMP generated e-receipts instead of paper receipts given against premium payments, the circular states. However, life insurance companies can keep on providing receipts against premium payments received through formal banking channels and mobile financial services (MFS) till any further notice. Insurers have been instructed not to provide any type of hand written or paper receipts for original OR, RR, and MR provided against payment made through other payment modes.
The circular also states that the UMP has taken a pivotal role in the digitization process of the insurance industry. The UMP has enabled information of all policies issued by every insurance company to be stored in a central database known as digital policy repository which acts as a digital backbone for this sector. Besides being a policy repository, the UMP platform has so far sent 1,07,14,125 notification SMS and 3,22,558 notification emails to approximately 84,08,405 policyholders. Additionally, an informative web portal called Policy Holder Portal (www.idra.ump/policyholder-portal) ) and a mobile application called Bima Tottho, available for download at Google Play Store, have been launched through the UMP Portal.
These initiatives have enabled a policyholder to view updated information on his/her policies using the Internet or smartphone.
A total of 17,14,321 policyholders have downloaded their 61,11,574 e-receipts through UMP platform since the inception of e-receipt. Moreover, a system called Online Agent Approval System will be soon introduced through UMP platform; this system will allow electronic registration and issuance of agent licence. UMP platform will also introduce a e-KYC system which will help resolve issues related to identity, and age during insurance proposals and claim settlement by verifying data against information stored at the Election Commission database. The in-built Business Intelligence (BI) Tools of UMP will help both IDRA and insurers take crucial data-driven decisions by providing them with necessary reports on various aspects of the industry. Besides efforts to introduce a Policy Tracking System and a Data Report System for Actuary Valuation are well under way.