Insurance regulator IRDAI on Wednesday released the draft guidelines on Bima Sugam, the e-marketplace for the insurance industry, whose services will be available free of charge to consumers.
The regulator has proposed forming a not-for-profit company where the shareholding will be held among life, general and health insurers and no single entity will have a controlling stake.
The IRDAI has not specified the capital requirement but has stated in the draft regulation that the shareholders as and when required shall contribute to the capital requirement of the company.
There are 27 life insurance companies including LIC and 32 general insurance companies including standalone health insurance companies and specialised insurers such as ECGC and Agriculture Insurance Company of India.
The IRDAI would nominate two members to the board of the company and would approve the appointment of the chairperson and CEO.
The company would facilitate, develop, operate and maintain the marketplace for providing various services to the insurance stakeholders.
“Bima Sugam shall be a one-stop solution for all insurance stakeholders 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, universalise and democratise insurance and to achieve the vision of Insurance for All by 2047,” the IRDAI said in its exposure draft.
“Consumers shall not be charged for availing services of Bima Sugam,” the exposure draft said. The draft regulations also propose to create a risk management committee to ensure that there are operational and risk management policies, procedures and systems.
The IRDAI has sought comments on the proposed regulations from the industry stakeholders by March 4, 2024.
Bima Sugam as a concept has been welcomed by the industry who feel that this will play a role in increasing insurance penetration in the country.
“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’s towards streamlining the entire insurance value chain, from policy issuance to claim settlement, thereby promoting transparency and collaboration at every stage,” said Tarun Chugh, MD and CEO, Bajaj Allianz Life Insurance.
“The guidelines will enable the industry to also build collaborative eco-systems for the benefit of customers. It’s an encouraging move and a welcome one for Indians, as they can get better access to insurance products designed for their long-term life goals,” he added.
The mutual fund industry already has a uniform online platform called MF Central for servicing investors.
Bima Sugam is one pillar of the Bima trinity being planned by the IRDAI, with the other two being Bima Vistaar - a bundled risk cover policy and Bima Vahak, a woman-centric insurance distribution channel at the grassroots level.