Discover What This Government-Backed Online Insurance Platform Is, the Approved Bima Sugam Platform

The Insurance Regulatory and Development Authority of India (IRDAI) recently approved eight principles-based rules at its board meeting. Notably, the “Bima Sugam” platform received the most approval.

Similar to an e-commerce platform, Bima Sugam is a government-backed internet insurance marketplace. It gives policyholders the ability to evaluate rates and purchase a range of insurance products, including health, auto, travel, and life insurance. The portal seeks to provide a complete solution for insurance needs in a single handy place by showcasing options from all sectors of life, health, and general insurance.

Regulations for the Insurance Electronic Marketplace (IRDAI) (Bima Sugam) effective 2024

The creation of “Bima Sugam—Insurance Electronic Marketplace,” a digital public infrastructure, is suggested in order to strengthen policyholder rights and safeguard their interests, expand insurance penetration in India, and improve availability, affordability, and accessibility.

In order to promote transparency, efficiency, and collaboration throughout the entire insurance value chain, as well as technological innovation in the insurance sector and the goals of universalizing and democratizing insurance, Bima Sugam will serve as a one-stop shop for all insurance stakeholders, including customers, insurers, intermediaries, and insurance agents. The ultimate goal is to achieve “insurance for all by 2047.”

It is suggested that the following rules be established for the creation, management, and operation of the Bima Sugam—Insurance Electronic Marketplace:

A) Under Section 8 of the Companies Act of 2013, a non-profit organization must be established.

B) The business will create, facilitate, develop, run, and manage the marketplace in order to provide the insurance stakeholders with a range of services.

C) Life, general, and health insurers own a large portion of the company’s shares, with no one business possessing a monopoly. When necessary, shareholders must make capital contributions.

D) IRDAI would propose two candidates for the company’s board of directors.

E) The board must establish a committee for risk management in order to reduce different risks.

F) Prior approval of the authorities to nominate the company’s CEO and chairman.

G) The services’ architecture is built on consent.

H) There will be no fees for customers using Bima Sugam’s services.

A number of other rules have also been announced by IRDAI, such as the need that insurers reveal surrender fees up front.

Six rules are combined into one comprehensive framework by the IRDAI (Insurance Products) rules, 2024, with the goals of making it easier for insurers to do business, increasing insurance penetration, and allowing them to react quickly to changing market needs.

According to a statement from IRDAI, these regulations reinforce the rules controlling guaranteed surrender value and special surrender value as well as the publication of such information. They also encourage good governance in product design and pricing.