November 9, 2017
In a directive issued yesterday, IRDA announced that Aadhaar number has to be linked to insurance policies under the prevention of money laundering rules for both existing and new policies.
IRDA said, “The Authority clarifies that, linkage of Aadhaar number to Insurance Policies is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017.
The move is in line with the government’s amended Prevention of Money Laundering Act requiring all financial services entities in India, including banks and mutual funds, to submit clients’ Aadhaar numbers and PAN for Know Your Customer authentication. PAN stands for Permanent Account Number, which is issued to each taxpayer. Since 1 July, the government has made linking the PAN with the Aadhaar mandatory for filing income tax returns and obtaining a new PAN.
All general, life and standalone health insurers have to comply with this directive with immediate effect.
All policyholders will have to link their policies and furnish the Aadhaar number. For existing policies, Aadhaar can be provided at the time of renewing the insurance cover.
Insurer expects it to help the sector in reducing frauds and quicker claim settlement.