Insurance regulator IRDAI has advised insurers not to mandatorily seek Aadhaar and PAN/Form 60 from customers, existing or new, for KYC (Know Your Customer) purpose.
It, however, allowed insurers to accept Aadhaar card as one of the documents for establishing identity, address of the customer subject to certain conditions that presumably are being stipulated to guard against misuse of the information.
The insurers can accept Aadhaar as one of the documents for KYC, only when the same is offered voluntarily by the proposer/policy-holder.
This would apply to the physical copy of e-Aadhaar, masked Aadhaar and offline Aadhaar XML.
‘Ensure masking’
The Insurance Regulatory and Development Authority of India (IRDAI), said insurers, however, “will under no circumstance do the authentication either using e-KYC facility or the yes/no authentication facility of UIDAI.”
Also, it directed the insurers to ensure that the first eight digits of the Aadhaar number are properly/appropriately masked.
“At no point in time more than last four digits of the Aadhaar number of any individual should be stored by the insurers in physical or digital form,” a circular issued by IRDAI on Tuesday said.
The advisory to the insurers came in the backdrop of a Supreme Court judgment of September, 2018, that held as unconstitutional making Aadhaar and PAN/Form 60 mandatory for availing financial services, including insurance. While laying down the conditions, under which all life and general insurers, could use Aadhaar, the regulator withdrew its circular, permitting the companies to undertake Aadhaar-based e-KYC.
