IRDAI Approves Creation Of Insurance Marketplace Bima Sugam

SUMMARY

It said that the marketplace would serve as a one-stop-platform for selling, servicing and claim settlements

As per IRDAI, the platform will promote “transparency, efficiency, and collaboration across the entire insurance value chain”

The new marketplace has been envisaged with deepening insurance penetration in the country and enhancing the availability, accessibility and affordability of insurance products

The Insurance Regulatory and Development Authority of India (IRDAI) has cleared all decks for the establishment of the much-awaited online insurance marketplace Bima Sugam.

The insurance regulator, at its board meeting held on March 19 in Hyderabad, approved the “IRDAI (Bima Sugam – Insurance Electronic Marketplace) Regulations, 2024”, which envisages the creation of the digital public infrastructure.

“The IRDAI (Bima Sugam – Insurance Electronic Marketplace) Regulations, 2024, aims to establish a Digital Public Infrastructure named Bima Sugam towards universalization and democratisation of insurance as well as empowering and safeguarding policyholders’ interests and achieve the vision of “Insurance for all by 2047”,” said the regulator in a statement.

The marketplace would serve as a one-stop solution for all insurance stakeholders, including customers, insurers, intermediaries, and agents. IRDAI added that the upcoming platform would promote “transparency, efficiency, and collaboration across the entire insurance value chain”.

This comes two months after the IRDAI issued draft regulations on the insurance marketplace and sought public feedback on the proposed norms.

The new marketplace has been envisaged with deepening insurance penetration in the country and enhancing the availability, accessibility and affordability of such products. As per the regulator’s own data, India’s overall insurance penetration reduced to 4% in the financial year 2022-23 (FY23), down from 4.2% in FY22.

The draft, floated earlier this year, noted that Bima Sugam would be established as a not-for-profit company under Section 8 of the Companies Act, 2013. It also said that no single entity would have a controlling stake and the shareholding of the company would be widely held amongst life, general and health insurers.

In addition, the IRDAI would also be empowered to appoint two members to the company’s board. The duo will then appoint a chairperson and CEO with prior regulatory approval, and will also constitute a risk management committee.

The development of Bima Sugam is expected to give a major fillip to the Indian insurtech industry and give a big impetus to the new-age insurance players riding the tech wave.

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