Why in news?

• The Insurance Regulatory and Development Authority of India (IRDAI) will soon roll out Bima Sugam - an online marketplace for buying and selling of insurance policies.
• IRDAI claims that the proposed Bima Sugam is a game changer and a UPI moment for the insurance segment.

What’s in today’s article?

• Insurance Regulatory and Development Authority of India (IRDAI)
• News Summary

Insurance Regulatory and Development Authority of India (IRDAI)

• IRDAI is a statutory body formed under an Act of Parliament, i.e., Insurance Regulatory and Development Authority Act, 1999.
• It was established for overall supervision and development of the Insurance sector in India.
• IRDAI's duties include:
  • Regulating the insurance business
  • Promoting the orderly growth of the insurance business
  • Protecting the interests of policyholders

News Summary: Bima Sugam

What’s Bima Sugam?

• About
  • It is an online platform where customers can choose a suitable scheme from multiple options given by various companies.
  • All insurance requirements, including those for life, health, and general insurance (including motor and travel) will be met by Bima Sugam.
  • This platform will help in the settlement of claims, whether it is health coverage or death claims, in a paperless manner on the basis of policy numbers.
• Steps taken by IRDA
  • IRDAI has appointed a committee for the creation of the platform.
  • It now plans to go for requests for proposals soon to appoint a service provider for the platform.
  • The service providers will be the technological partners for creating and running a platform to provide all the services in one place.
• Ownership of this platform
  • Life insurance and general insurance companies will own a 47.5 per cent stake each, while brokers and agent bodies will own 2.5 per cent each.
• Timeline for the launch
  • IRDAI initially wanted the Bima Sugam to be up and running by January 2023 but postponed it to August 1.
  • It has now postponed the implementation to June 2024.

What are its benefits?

• Single window for the policyholder
  • The proposed platform would act as a single window for the policyholder to manage his/her insurance coverage.
  • It will provide end-to-end solutions for customers’ insurance needs i.e., purchase, service, and settlement in a seamless manner.
• Empowerment of consumers
  • Currently, there are hundreds of insurance schemes in the life and non-life sectors.
  • Customers have no idea who is offering the best deal and the pros and cons of different schemes.
  • Bima Sugam will enable them to identify a suitable scheme for the customers in a single platform.
• Benefits for insurance companies and intermediaries
  • It will facilitate insurance companies to access the validated and authentic data from various touch points on a real-time basis.
  • The platform will interface for the intermediaries and agents to sell policies and provide services to policyholders, among others, and reduce paperwork.
• Universalise and democratise insurance
  • IRDAI says Bima Sugam is an electronic marketplace protocol which would universalise and democratise insurance.
  • This protocol will be connected with India Stack which is a set of APIs (application programming interface) that allows governments, businesses, startups, etc. to utilise the unique digital infrastructure to enable seamless delivery of services.

Will the physical mode go away?

• Customers will open an insurance account and the policies will be stored in this account, thus obviating the need for physical documents.
• Identifying the right policy, buying it, settling the claims and renewals will be streamlined in online process.
• The process will be mostly on the lines of demat accounts and online trading in the case of stock markets.