On 13th February 2024, The Insurance Regulatory and Development Authority of India (IRDAI) has issued an exposure draft regulations, “IRDAI (Bima Sugam – Insurance Electronic Marketplace) regulations, 2024”, for a digital infrastructure called Bima Sugam.
About Bima Sugam:
i.Bima Sugam is a one-stop insurance e-marketplace for all stakeholders of Insurance to promote transparency, efficiency, collaboration across the entire insurance value chain.
ii.Bima Sugam, is part of the Bima trinity, which aims to to empower and protect the interest of policyholders. The other branches are Bima Vistaar and Bima Vahak.
Objective:
i.To empower and protect the interest of policyholders.
ii.To increase penetration of insurance in India.
iii.To enhance availability, accessibility and affordability.
Key Points:
The draft proposed to set up a regulatory framework for establishment, governance, functioning of the Bima Sugam – insurance e-marketplace with the following.
i.Not-for-Profit company will be established as a Section 8 of the Companies Act, 2013.
ii.The company will develop and maintain the marketplace to provide service to insurance stakeholders.
iii.Shareholding of the company will be held among Life, General, and Health insurers, with no controlling stake, and shareholders shall contribute to capital if required.
iv.IRDAI will nominate two members on the board of the company and prior approval from IRDAI should be received to appoint Chairperson & Chief Executive Officer (CEO) of the company.
v.The board will also constitute a risk management committee.
vi.Consent-Based Architecture: The platform will prioritize user control over data and interactions, enhancing trust and privacy.
vii.Bima Sugam will offer free services to consumers, making insurance more accessible across socio-economic backgrounds.
IRDAI Proposes 30 days ‘free look’ period for policies from date of receipt
IRDAI also proposed to extend the free-look period for insurance policies from 15 days to 30 days to ensure protection of policyholders’ interest.
- It is a part of draft on IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024.
Points to note:
i.Individuals get a free look-up period when purchasing insurance to cancel without fees, and if returned within this time, the initial premium is refunded.
ii.This extension allows policyholders more time to review and understand their insurance policy, making informed decisions.
Key Points:
i.The free-look period for the policies, obtained through any mode, shall be 30 days from the date of receipt of the policy document”
ii.Insurers will collect bank details for electronic refunds and claims.
iii.The draft includes nomination provisions and mandates bank account details for electronic transfers.
About Insurance Regulatory and Development Authority of India (IRDAI):
IRDAI is a statutory body that regulates and develops the insurance industry in India.
It was constituted in 1999 and incorporated as a statutory body in 2000.
Chairman– Debasish Panda
Headquarters– Hyderabad, Telangana
