IRDAI issues draft rules for insurance e-marketplace ‘Bima Sugam’

Insurance regulator Insurance Regulatory and Development Authority (IRDAI) has issued an exposure draft on an insurance electronic marketplace – Bima Sugam, which is being mooted as a “one-stop platform” for facilitating all insurance-related services.

The Bima Sugam, which will facilitate all stakeholders including customers, insurers, intermediaries or insurance intermediaries and insurance agents, is being projected as a “UPI moment” for insurance, which could help the country achieve the vision of “Insurance for all by 2047”.

An IRDAI circular on the draft says the Bima Sugam will protect and empower policyholders. Additionally, it'll help increase insurance penetration and make it easy for people to find everything related to their insurance policies on one platform. It will be a free platform for all consumers.

"Digital Public Infrastructure called “Bima Sugam - Insurance Electronic Marketplace” is proposed to be established to empower and protect the interest of policyholders, to increase penetration of insurance in India and to enhance availability, accessibility and affordability," IRDAI's (Bima Sugam - Insurance Electronic Marketplace) Regulations, 2024, exposure draft says.

Regarding the regulatory framework for the establishment, governance, and functioning of the Bima Sugam, the exposure draft says a "not-for-profit" company will be formed as per Sec 8 of the Companies Act, 2013. "The company shall establish, facilitate, develop, operate and maintain the Marketplace for providing various services to the insurance stakeholders."

Additionally, the shareholding of the company will be widely held among life, general and health insurers, and no single entity has a controlling stake. "Shareholders will contribute to capital as and when required."

IRDAI would nominate two members to the board of the company, and the board will constitute a "risk management committee" to mitigate various risks. "Prior approval of authority for appointment of chairperson & CEO of the company. Consent-based architecture for the services. Consumers shall not be charged for availing services of Bima Sugam."

The functions of the marketplace will include efficient and effective end-to-end digital solutions to meet the requirements of the insurance stakeholders and the market it serves. It will implement consent-based architecture to its services; allow fair and open role-based access of its services; will be operative and accessible at all times; access to data providers with appropriate consent mechanisms; not store, hold or maintain any data; and deliver its obligations.

The insurance regulator has asked stakeholders to forward their comments or suggestions on the proposed regulations.

India is projected to become the 6th largest insurance market by 2032. India’s life insurance industry alone is set to grow at a compound annual growth rate (CAGR) of 12.5% from INR9.0 trillion ($128.0 billion) in 2023 to INR14.5 trillion ($170.6 billion) in 2027, in terms of gross written premiums, forecasts UK-based market research firm GlobalData.

The Invest India data shows around 68% of India’s population is young and 55% of its population is in the age group of 20-59 (working population) in the year 2020 and is estimated to reach 56% of the total population by 2025. These point towards a young insurable population in India.

On Wed, Feb 14, 2024 at 11:04 AM Manoj Sharma <manoj.sharma@fortuneindia.com> wrote:

IRDAI issues draft rules for insurance e-marketplace ‘Bima Sugam’

Kicker: IRDAI's 'Bima Sugam' projected to help India achieve 'insurance for all by 2047'

Insurance regulator Insurance Regulatory and Development Authority (IRDAI) has issued an exposure draft on an insurance electronic marketplace – Bima Sugam, which is being mooted as a “one-stop platform” for facilitating all insurance-related services.

The Bima Sugam, which will facilitate all stakeholders including customers, insurers, intermediaries or insurance intermediaries and insurance agents, is being projected as a “UPI moment” for insurance, which could help the country achieve the vision of “Insurance for all by 2047”.

An IRDAI circular on the draft says the Bima Sugam will protect and empower policyholders. Additionally, it'll help increase insurance penetration and make it easy for people to find everything related to their insurance policies on one platform. It will be a free platform for all consumers.

"Digital Public Infrastructure called “Bima Sugam - Insurance Electronic Marketplace” is proposed to be established to empower and protect the interest of policyholders, to increase penetration of insurance in India and to enhance availability, accessibility and affordability," IRDAI's (Bima Sugam - Insurance Electronic Marketplace) Regulations, 2024, exposure draft says.

Regarding the regulatory framework for the establishment, governance, and functioning of the Bima Sugam, the exposure draft says a "not-for-profit" company will be formed as per Sec 8 of the Companies Act, 2013. "The company shall establish, facilitate, develop, operate and maintain the Marketplace for providing various services to the insurance stakeholders."

Additionally, the shareholding of the company will be widely held among life, general and health insurers, and no single entity has a controlling stake. "Shareholders will contribute to capital as and when required."

IRDAI would nominate two members to the board of the company, and the board will constitute a "risk management committee" to mitigate various risks. "Prior approval of authority for appointment of chairperson & CEO of the company. Consent-based architecture for the services. Consumers shall not be charged for availing services of Bima Sugam."

The functions of the marketplace will include efficient and effective end-to-end digital solutions to meet the requirements of the insurance stakeholders and the market it serves. It will implement consent-based architecture to its services; allow fair and open role-based access of its services; will be operative and accessible at all times; access to data providers with appropriate consent mechanisms; not store, hold or maintain any data; and deliver its obligations.

The insurance regulator has asked stakeholders to forward their comments or suggestions on the proposed regulations.

India is projected to become the 6th largest insurance market by 2032. India’s life insurance industry alone is set to grow at a compound annual growth rate (CAGR) of 12.5% from INR9.0 trillion ($128.0 billion) in 2023 to INR14.5 trillion ($170.6 billion) in 2027, in terms of gross written premiums, forecasts UK-based market research firm GlobalData.

The Invest India data shows around 68% of India’s population is young and 55% of its population is in the age group of 20-59 (working population) in the year 2020 and is estimated to reach 56% of the total population by 2025. These point towards a young insurable population in India.