New Delhi: In a piece of good news for insurance holders across the nation, Bima Sugam, which was started by the Insurance Development and Regulatory Authority of India (IRDAI), has decided to offer free services to consumers through a not-for-profit structure. Here’s all you need to know about it.
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What’s Bima Sugam And Its Purpose
Bima Sugam is a digital public infrastructure or protocol that has open standards and interoperable platforms. It enables seamless integration with various services to facilitate the purchase, sale, and settlement of insurance claims. Moreover, it also enables grievance redressal and servicing of insurance policies and other related matters. Notably, in a major development, all insurance companies will join the proposed platform, as per a report by the Indian Express.
“Consumers shall not be charged for availing of the services of the marketplace,” IRDAI has said.
IRDAI Proposes To Increase Free Look Period To 30 Days
In a step to enhance the protection of insurance policyholders, the Insurance Regulatory and Development Authority of India (IRDAI) has proposed to extend the free look period to 30 days in the case of life and health insurance policies.
The free-look period is the period during which a policyholder can review his decision to purchase the policy and, if not satisfied, return the product and get a full premium refund. The IRDAI is reviewing its various regulations to enhance the ease of doing business, reduce the compliance burden on the stakeholders and ensure the policyholder’s interest.
On Wednesday, the IRDAI issued the draft regulations titled ‘Insurance Regulatory and Development Authority of India (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024,’ consolidating eight different regulations.
The draft regulation relates to the protection of policyholders’ interests and allied matters like receipt of premiums, nomination, assignment of policies, insurance advertisements, opening of branches and others.
As regards the policyholders, the draft proposes: (a) Free Look Period: The free look period for the policies, obtained through any mode, shall be 30 days from the date of receipt of the policy document. (b) In order to enable electronic transfer of refunds and payments of claims, the insurer must collect the details of the bank accounts of the insured at the proposal stage; (c) No policy in the case of life insurance shall be issued unless a nomination is obtained. (d) Nomination provisions relating to general, wherever applicable and health insurance policies introduced. (e) Insurance policies meeting the defined criteria are to be issued in electronic form.
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For the insurers:
(a) The requirement of filing an advertisement with the authority has been dispensed with.
(b) There is no prior approval requirement for insurers meeting the specified criteria.
(c) An insurer with a specified solvency ratio, profitability in three out of five years and a satisfactory track record can now open foreign branches, including an office at IFSCA.
(d) The returns specified for foreign branch offices are dispensed with.
(e) The existing requirement of reporting outsourcing is dispensed with.
Insurers are required to make necessary disclosures in this regard in their annual report. The IRDAI has sought comments on the draft regulations by March 4 this year.
(With inputs from agencies)
