We all have heard about the ‘Insurance for All’ by 2047. And guess what? The Insurance Regulatory and Development Authority of India (IRDAI) is making significant progress. It is committed to making the long-awaited electronic insurance marketplace, Bima Sugam, a reality. This initiative aims to modernise the Indian insurance sector using digital technology.
Bima Sugam will be focused on accessibility, affordability, and efficiency.
Let us understand what Bima Sugam is and how it is beneficial for us!
What is Bima Sugam
IRDAI’s recent initiative, Bima Sugam, will be a significant game changer in the general insurance market.
Bima Sugam will be the largest online market for insurance products and services.
Given India’s vast population diversity, it holds the potential. IRDa’s model for substantial success would serve as a standard for other developing economies.
Bima Sugam will unite all stakeholders and insurance services on a single platform.
Facilitating Insurance Transactions
On February 13, the IRDAI released draft regulations for establishing an electronic insurance marketplace. It aims to unite insurers, policyholders, and intermediaries on a single digital platform.
- This platform, Bima Sugam, will streamline the buying and selling of life, health, and general insurance policies.
- It will also facilitate policy servicing, claims settlement, and grievance redressal.
- Importantly, users will have free access to this platform.
Described as a robust digital public infrastructure, Bima Sugam will operate on open standards. Its seamless integration with various services aims to simplify insurance transactions.
The chairman of IRDAI sees Bima Sugam as a possible “UPI moment” for the insurance sector. This aligns with the regulator’s goal of achieving “Insurance for all by 2047.”
This comparison highlights the transformative potential of the electronic marketplace.
Key Features of Bima Sugam
The key features of Bima Sugam, as currently available in the public domain, include:
- Bima Sugam will connect and empower all insurance stakeholders.
- It will operate as a revolutionary digital platform akin to Amazon. It integrates advanced technologies to automate and digitise processes for various stakeholders. These stakeholders include insurance companies, policyholders, intermediaries, insurance repositories, and external data sources.
- Bima Sugam will cover all insurance requirements, covering life, health, and general insurance (including motor, travel, etc.).
- The Life Insurance Council and General Insurance Council shall support Bima Sugam.
Structural Framework by IRDAI
Bima Sugam will be set up as a not-for-profit entity under section 8 of the Companies Act, 2013. Its shareholding will be spread among life, general, and health insurers to avoid any single entity holding a controlling stake.
The IRDAI will appoint two members to the company’s board.
This board will oversee the appointment of a chairperson and CEO, subject to regulatory approval. Additionally, there will be a risk management committee.
IRDAI Encourages Feedback
The IRDAI is actively gathering feedback on the Bima Sugam proposals. All the stakeholders, such as policyholders, insurance companies, distributors, etc, can contribute. This input will play a crucial role in shaping the final regulations.
Positive Industry Outlook
The IRDAI expects Bima Sugam to protect policyholders and boost insurance reach in India. By making insurance easier to find, use, and afford, this online marketplace can make a big difference in the industry.
Conclusion
With the draft regulations by IRDAI for Bima Sugam now in circulation, the insurance industry is on the brink of a digital revolution. As the framework takes shape, Bima Sugam promises to revolutionise the insurance sector.
Source- moneycontrol.com, gicouncil.in
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