Life Insurance Council, the industry body of life insurance companies in India, is working on a proposal that will help buyers of life insurance policies save their policies in a digital form, just like company shares. This means they will not have to maintain paper copies of each transaction during the policy period, which is generally between 20 years and 30 years. A 12-member committee of the Council is likely to submit these recommendations to the Insurance Regulatory and Development Authority (Irda) next month. “Once the recommendations come to us, we will approve it,” said a senior Irda official. He added, “Insurance policies in demat form will help in smoother expansion of the industry, lower distribution costs, and higher transparency regarding benefit illustrations and costs involved for a policyholder”. This facility will be beneficial for both insurance companies as well as the insured individuals. Customers, who normally fall prey to mis-selling due to less or no knowledge of the commissions paid and terms of risk cover, can now get all policy-related information, including commissions and fees paid to the company, exact benefits offered, premium payment and renewal-related dates, and terms and conditions of risks covered with the demat form. For insurers, it will be significant reduction in distribution costs. “Typically, a company incurs (a cost of) Rs. 20 per policy, merely as paperwork and distribution costs,” said S.B. Mathur, the council’s secretary general of Life Insurance Council. “Fifty million policy sales would simply mean costs of nearly Rs. 100 crore for the industry.” In India, a total of 23 life insurers had sold at least 300 million policies and collected Rs. 2.21 trillion in premium at the end of March 2009, while during the nine months to Dec. 2009 they managed to sell 33.8 million policies. The industry is expected to grow at 15-20 per cent for the fiscal year ending March 2011.