IRDAI issues guidelines for KYC in paperless form using technology of VBIP

Sep 21, 2020 | by Avantis RegTech Legal Research Team


Industry Specific Compliance

The Insurance Regulatory and Development Authority of India (IRDAI) on September 21, 2020 has permitted the use of Video Based Identification Process (VBIP) to simplify the process of Know Your Customer (KYC). The VBIP is an alternative (optional)electronic process of Identification or KYC in paperless form, carried out by the insurer or authorised person by undertaking seamless, secure, real-time, consent based audio-visual interaction with the customer or beneficiary to obtain identification information including the necessary KYC documents required for the purpose of client due diligence and to ascertain the veracity of the information furnished by the customer or beneficiary.

In this regard, IRDAI has issued the following guidelines:

• Insurers may undertake live VBIP by developing an application which facilitates KYC process either online or face-to-face in-person verification through video.

• The insurer/authorised person shall ensure that the online video is clear and the customer/beneficiary along with the authorised person in the video shall be easily recognisable and shall not be covering their face in any manner.

• Live location of the customer/beneficiary (Geotagging) shall be captured (both for online/ face-to-face VBIP) to ensure that customer/beneficiary is physically present in India.

• The authorised person/ Insurer shall ensure that the photograph and other necessary details of the customer/beneficiary in the Aadhaar/ OVD matches with the customer/beneficiary present for the VBIP

• In case of offline verification of Aadhaar using XML file or Aadhaar Secure QR Code, if voluntarily submitted by the Customer/ beneficiary, it shall be ensured that the generation of XML file or QR code is recent and not older than 3 days from the date of carrying out VBIP.

• All accounts opened or any service provided based on VBIP shall be activated only after being subject to proper verification by the insurer to ensure that the integrity of process is maintained and is beyond doubt.

• Insurers shall ensure that the process is a seamless, real-time, secured, end-to-end encrypted audio-visual interaction with the customer/beneficiary and the quality of the communication is adequate to allow identification of the customer/ beneficiary beyond doubt. Insurers shall carry out the liveliness check in order to guard against spoofing and such other fraudulent manipulations.

• To ensure security, robustness and end to end encryption, the insurers shall carry out software and security audit and validation of the VBIP application as per extant norms before rolling it out and thereafter from time to time.

• The audio-visual interaction shall be triggered from the domain of the insurers itself, and not from third party service provider. The VBIP process shall be operated by the Insurer/authorized persons. The activity log along with the credentials of the official performing the VBIP shall be preserved.

• Authorized person of the insurer shall facilitate face to face VBIP process only at the customer/beneficiary end.

• However, the ultimate responsibility for client due diligence will be with the insurer.

• Insurer shall maintain the details of the concerned Authorised person, who is facilitating the VBIP.

• Insurers shall ensure to redact or blackout the Aadhaar number as per extant Prevention of Money Laundering Rules.

[Notification No. IRDAI/SDD/CIR/MISC/ 245 /09/2020]


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