IRDAI Nears Launch of Bima Sugam: The Electronic Insurance Marketplace
In a significant move toward enhancing the insurance landscape, the Insurance Regulatory and Development Authority of India (IRDAI) is on the brink of realizing its long-anticipated electronic insurance marketplace – Bima Sugam.
On February 13, the regulatory body unveiled draft regulations, marking a pivotal step towards establishing a unified digital platform for insurers, policyholders, and intermediaries. Bima Sugam aims to streamline the sale and purchase of life, health, and general insurance policies, alongside facilitating seamless policy servicing, claim settlement, and grievance redressal. Notably, access to this platform will be fee-free for customers.
Describing Bima Sugam as a robust digital public infrastructure, the IRDAI envisions it as a protocol with open standards and interoperable platforms. It will allow for the integration of various services, simplifying insurance-related transactions.
Operated as a not-for-profit entity under section 8 of the Companies Act, 2013, Bima Sugam will ensure widespread shareholding among life, general, and health insurers, with no single entity holding a controlling stake. The IRDAI will nominate two members to the company’s board, which will appoint a chairperson and chief executive officer (CEO), subject to regulatory approval, and establish a risk management committee.
The inception of Bima Sugam, after nearly two years of development, reflects the IRDAI’s commitment to safeguarding policyholders’ interests and bolstering insurance penetration in India. By enhancing the availability, accessibility, and affordability of insurance products and services, the marketplace is poised to play a pivotal role in realizing the regulator’s vision of ‘Insurance for all by 2047.’
IRDAI Chairman views Bima Sugam as akin to a ‘UPI (United Payments Interface) moment’ for the insurance sector, emphasizing its potential to revolutionize industry dynamics. Addressing concerns raised by distributors, the Chairman assured that the marketplace would not jeopardize their businesses; rather, it would create new avenues for efficient distribution models.
Seeking input from stakeholders including policyholders, insurance companies, distributors, and insurtech players, the IRDAI has invited feedback on the Bima Sugam proposals until March 4, 2024. This collaborative approach underscores the regulator’s commitment to fostering an inclusive and dynamic insurance ecosystem in India.
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