The board meeting of the Insurance Regulatory and Development Authority of India (IRDAI) recently greenlit eight principle-based regulations, with notable approval being granted to the ‘Bima Sugam’ platform.
Bima Sugam serves as a government-backed online marketplace for insurance, resembling an e-commerce platform. It empowers policyholders to compare premiums and procure various insurance products, spanning life, health, motor, and travel insurance. The platform aims to feature offerings from all segments of life, health, and general insurance, offering a comprehensive solution for insurance requirements in one convenient location.
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IRDAI (Bima Sugam – Insurance Electronic Marketplace) Regulations, 2024
A Digital Public Infrastructure called ‘Bima Sugam – Insurance Electronic Marketplace’ is proposed to be established to empower and protect the interest of policyholders, to increase penetration of insurance in India and to enhance availability, accessibility and affordability.
Bima Sugam will be a one-stop solution for all insurance stakeholders vis a-vis customers, insurers, intermediaries or insurance intermediaries and insurance agents to promote transparency, efficiency, collaboration across the entire insurance value chain, technological innovation in the insurance sector, universalise and democratise insurance and to achieve the vision of ‘Insurance for all by 2047’.
A regulatory framework for the establishment, governance, and functioning of the Bima Sugam – Insurance Electronic Marketplace with the following is proposed to be laid down;
- A) A Not-for-profit company shall be formed as per Sec 8 of Companies Act, 2013.
- B) The company shall establish, facilitate, develop, operate and maintain the Marketplace for providing various services to the insurance stakeholders.
- C) Shareholding of the company is widely held amongst life, general and health insurers and no single entity has a controlling stake. Shareholders shall contribute to capital as and when required.
- D) IRDAI would nominate two members on the board of the company.
- E) Board to constitute a risk management committee to mitigate various risks.
- F) Prior approval of authority for appointment of chairperson & CEO of the company.
- G) Consent-based architecture for the services.
- H) Consumers shall not be charged for availing services of Bima Sugam.
IRDAI has also notified a host of regulations, including on surrender charges wherein insurers have to disclose such charges upfront.
IRDAI (Insurance Products) Regulations, 2024 merge six regulations into a unified framework aimed at enabling insurers to swiftly respond to evolving market demands, enhancing the ease of conducting business, and boosting insurance penetration.
These regulations promote good governance in product design and pricing, including strengthening the principles governing guaranteed surrender value & special surrender value along with disclosures thereof, IRDAI said in a statement.
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