Life Insurance Corporation of India is having reservations over dematerialization of policies as it fears this could lead to unhealthy market of trading if checks are not placed on policies assignment. The Insurance Regulatory and Development Authority has proposed that instead of issuing certificates of life insurance , companies could maintain electronic records in a central repository similar to the National Securities Depository Ltd. The insurance repository guidelines state that an insurer on receipt of intimation of assignment from the policyholder shall register the same in its record and intimate the insurance repository. Assignment is the process whereby a policyholder can transfer all benefits, including maturity and death benefits under a policy, to a third-person . Although life insurance contracts are not tradable securities like stocks or bonds, it is possible to get an upfront payment from a third-party who is willing to pay a price for getting higher benefits in future through assignment of the policy.

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