The Insurance Regulatory and Development Authority of India (IRDAI) on February 13 issued draft regulations on Bima Sugam, which is a one-stop online insurance marketplace. The one-stop solution is slated to facilitate a range of services related to insurance policies — from purchase, sale, servicing and settlement of claims to grievance redressal.
Bima Sugam, which is part of the Bima trinity, seeks to empower and protect the interest of policyholders. The other branches are Bima Vistaar and Bima Vahak.
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The insurance regulator in its draft regulations said Bima Sugam, which is being pitched as the “UPI moment” for the insurance industry, shall be a one-stop solution for all Insurance stakeholder’s vis-a-vis customers, insurers, intermediaries or insurance intermediaries and insurance agents. Customers will not have to pay any fee to access this platform.
“Bima Sugam shall be a one-stop solution for all Insurance stakeholder’s 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, universalize and democratise insurance and to achieve the vision of “Insurance for all by 2047″,” IRDAI said in the circular.
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The platform will be formed under Section 8 of the Companies Act, 2013, and will be a not-for-profit company. “Shareholding of the company will be widely held amongst life, general and health insurers, with no single entity having controlling stake. Shareholders shall contribute to capital as and when required,” the IRDAI said.
The IRDAI will nominate two members to the company board, which will appoint a chairperson and CEO. The appointments will have prior regulatory approval. The board will also have a risk management committee.
Insurers may facilitate the availability of their insurance products for sale and provide all services related to insurance policy, including settlement of claims, grievance redressal in the marketplace on an ongoing basis, the draft said.
How Bima Sugam portal will be helpful
The platform will enable insurance companies to easily access validated and authentic data from multiple touch points in real time. It will provide an interface for intermediaries and agents to sell policies and offer services to policyholders, ultimately reducing the need for paperwork.
Additionally, the process of purchasing a policy will be streamlined, resulting in decreased paperwork. Settlement of claims and policy renewals will also be expedited, benefiting customers with a faster and more convenient experience.
India is expected to be the sixth largest insurance market by 2032. The life insurance sector in India is predicted to experience a compound annual growth rate (CAGR) of 12.5% from Rs 9.0 lakh crore in 2023 to Rs 14.5 lakh crore in 2027, in terms of gross written premiums.
“The draft regulations for Bima Sugam is a big step towards bringing this transformative initiative to fruition. The regulations focus on making insurance easy to access and affordable for everyone. It is towards streamlining the entire insurance value chain, from policy issuance to claim settlement, thereby promoting transparency and collaboration at every stage. These initiatives will play a huge role in driving penetration of insurance and enabling us achieve the vision of Insurance For All by 2047. The guidelines will enable the industry to also build collaborative eco-systems for the benefit of customers. It’s an encouraging move and a welcomed one for Indians, as they can get better access to life insurance products designed for their long-term life goals,” said Tarun Chugh, MD and CEO, Bajaj Allianz Life Insurance.
