IRDAI publishes proposed regulations to support internet insurance marketplaces
In addition to facilitating the purchasing and selling of insurance policies, the planned electronic marketplace will also help with claims settlement, policy servicing, as well as grievance redressal. Policyholders will not be required to pay a fee in order to utilize this digital infrastructure platform.
Bima Sugam, the much anticipated electronic insurance marketplace, is almost here.
The ambitious goal of the Insurance Regulatory and Development Authority of India (IRDAI) to establish Bima Sugam, an electronic insurance marketplace, is getting closer to reality.
On February 13, the insurance regulator unveiled draft regulations for the eagerly anticipated plan to unite insurers, policyholders, and intermediaries on a single digital marketplace. This marketplace will enable the sale and purchase of life, health, as well as general insurance policies as well as policy servicing, claim resolution, and grievance redress. There will be no cost for customers to use this platform.
"The insurance electronic marketplace, or BIMA Sugam, is a strong digital public infrastructure or protocol that enables seamless integration with services and supports the buying, selling, settlement of insurance claims, grievance redressal, and servicing of insurance policies, among other related matters across multiple platforms," according to IRDAI.
The company will be non-profit and established under Section 8 of the Companies Act, 2013. According to IRDAI, "shareholders will contribute capital as and when required," along with "the shareholding of the company will be broadly distributed among life, general, and health insurers, with no one organization having a controlling stake."
The regulatory body will propose a pair of individuals to the company's board of directors, designate the CEO and chairman subject to regulatory clearance beforehand, and establish a risk management committee.
Through improving the "availability, accessibility plus affordability" of insurance goods and services, the insurance regulator believes that Bima Sugam, which has been under development for approximately two years, would safeguard policyholders' interests and contribute to a rise in insurance penetration in India.
The planned electronic marketplace, according to the chairman of the IRDAI, might be a UPI (United Payments Interface) moment for the insurance sector, advancing the regulator's objective of guaranteeing "insurance for all by 2047."
Debashish Panda, the chairman of the IRDAI, attempted to calm distributors' fears in June of last year by stating that they could use the market to sell policies ensuring that "no jobs will be lost, not more jobs will be created. This could result in efficient delivery models."
By March 4, 2024, IRDAI has asked all stakeholders—policyholders, insurance firms, distributors, insurtech businesses, etc.—for input on the insurance Sugam ideas
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