Risk Management

What is PolkaCover's approach to KYC?

For the traditional insurance backed products KYC is needed as it is a requirement from the insurance provider.

However, the P2P Insurance version is being developed in a way that KYC would be needed only at the time that claims payout but not at policy issuance.

For this reason, we are building both options in our platform. Traditional Insurers (Require KYC) & P2P Platform (No KYC) allowing users to be comfortable in whichever mode they want to proceed in purchasing their coverages.

How will personal and user data be stored and how will it be protected from hacks?

Data protection is key and is even more important when it comes down to providing insurance services. When working in our insurance marketplace model, we won’t be storing user data but would act as an intermediary between the user & the insurance company.

In its simplest form, user data received on the platform is transmitted to the insurer via API’s ( routing it through our oracle partner). The process repeats during policy issuance.

How does PolkaCover handle regulation?

In terms of jurisdiction, although our Business team is based in Dubai ( and the tech team is based in India), the marketplace platform will be incorporated out of BVI to allow us(and the insurers) to be able distribute these policies to a global audience as Dubai does not allow such flexibility to distribute insurance products globally.

Most of the western countries ( barring US/Canada) will be available to purchase in the initial launch. As US/Canada is heavily regulated markets, we would look at adding them on at a later stage once we receive approval from the insurers & our legal advisors.

What measures are in place to prevent fraudulent claims?

Unfortunately, fraudulent claims happen in all models of insurance (traditional or P2P).

Insurance plans are always made in good faith that the larger audience wants to use the policies to safeguard their interests ( and not defraud the insurer )

When it comes to claim management in the traditional insurance providers, the claim payouts are governed based on the T&C’s of the insurance providers. In case fraudulent claims are identified, the T&C’s are refined with new clauses to ensure fraudulent claims don’t get paid out any further. This method keeps refining the product & also allows the larger (good faith) policy users to be able to get better pricing in the long run.

In our P2P platform, claims assessment is managed in 3 steps.

1) Insurance Risk Pool participants

2) Claim Assessment Stakeholders

3) Governance stakeholders

As P2P insurance is a community-based claims management model, if a claim is raised declined(by over 10%) and goes into a dispute with the policyholder, a review is held by a second level authority (Claim Assessment Stakeholders).

In case the case remains declined and still is disputed by the user, the final assessment is taken by the Governance body (which includes the PolkaCover core team)

Everyone involved in claim adjudication will have their tokens staked to validate and approve any claim, this is then governed by a second layer by a governance body which will initially consist of the PolkaCover team and in case any bad actors are found violating the terms of adjudication their staked tokens will be burnt.