CKYC and KYC in insurance

What are KYC and CKYC in insurance?

KYC (know your customer) is the process an insurer uses to confirm who its customer is: their identity, address and photograph, and for businesses, who owns and controls them. It is required by the Prevention of Money-laundering Act, 2002 and the PML Rules, 2005, and applied to insurers through IRDAI's guidelines. CKYC (Central KYC) is the government's central registry of KYC records. Once a customer's KYC is uploaded there, they get a KYC identifier, and any regulated entity, including an insurer, can fetch the verified record using that number instead of collecting documents again.

How KYC works for insurers in India

The rulebook. IRDAI's Master Guidelines on Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT), issued on 1 August 2022 and in force from 1 November 2022, apply to all classes of life, general and health insurance, except reinsurance. They brought IRDAI's earlier AML circulars into one document. Since then, general insurers have asked for KYC before issuing retail policies such as motor, health and travel.

Accepted methods. As of October 2026, an insurer may complete KYC through any of these, along with PAN or Form 60 where applicable:

• Aadhaar online authentication, where the government has notified the insurer under Section 11A of the PML Act
• Aadhaar offline verification
• Digital KYC under the PML Rules
• Video Based Identification Process (VBIP), with the customer's consent
• The KYC identifier allotted by the Central KYC Records Registry
• Officially valid documents (OVDs) such as passport, driving licence or voter ID

A customer who cannot or does not wish to use Aadhaar authentication can give OVDs instead.

Group policies. KYC is done on the master policyholder and its beneficial owners. The master policyholder keeps the members' details and gives them to the insurer when needed.

Existing customers. Where KYC for older policies is incomplete, insurers had to collect it within two years for low risk customers and within one year for others.

At payout. The guidelines require verification at the claim and payout stage, and payments go only to the parties provided for in the contract, such as the policyholder, beneficiaries, legal heirs or assignees. Third party payouts are not allowed.

How CKYC works

The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) acts as the Central KYC Records Registry, under a government notification of 26 November 2015. For insurers, the 2022 guidelines say:

1. If the customer gives a KYC identifier, the insurer retrieves the record from CKYCR, and the customer need not submit documents again unless the details have changed.
2. If no identifier is given, the insurer searches CKYCR and records the identifier if one exists.
3. If none exists, the insurer collects KYC in the prescribed template and uploads it to CKYCR within 10 days of starting the relationship.
4. Once the registry allots an identifier, the insurer tells the customer confidentially.
5. Where Aadhaar is used, only the last four digits are uploaded.
6. CKYC data can be used only to verify identity and address, and cannot be shared with third parties without authorisation.

The Union Budget for 2025-26 announced a revamped Central KYC registry. Distribution teams should check CERSAI and IRDAI notices for the current status of the upgraded system and any new upload formats.

What KYC and CKYC mean for distribution

• KYC is now part of every sale. For motor renewals, travel and health, a missing KYC can stop issuance. POSPs, agents and dealer desks need a quick KYC flow, preferably through CKYC lookup or Aadhaar-based methods, built into the quote journey.
• Ask for the KYC identifier first. Many customers already have one from a bank, mutual fund or earlier policy. Using it saves time and reduces document errors.
• Name and date mismatches delay claims. Differences between the KYC record, the policy and the bank account are a common reason for payout delays. Check spellings and dates at the proposal stage.
• Capture nominee and bank details properly. At claim time the insurer will verify the claimant's identity, so a correct nominee record with matching documents shortens settlement.
• Treat KYC data as confidential. The guidelines limit use of CKYC data. The 2025 amendment also added Section 14C to the Insurance Act, which requires insurers and other IRDAI-regulated entities, intermediaries included, to keep policyholders' KYC information and solicitation documents confidential and not share them with third parties except where the law requires, there is a public duty, or the customer expressly consents. Agents should not store customers' identity documents on personal phones or share them on messaging apps.
• Watch for red flags. Premiums far out of line with income, or pressure to pay a third party at claim time, are warning signs that channels should report to the insurer.