The Insurance Regulatory and Development Authority of India (IRDAI) has unveiled draft regulations for the highly anticipated electronic insurance marketplace, Bima Sugam, also known as a digital public infrastructure.
Purpose and Scope
Bima Sugam is designed to serve as a comprehensive platform catering to all stakeholders in the insurance ecosystem, including customers, insurers, intermediaries, and insurance agents. It aims to foster transparency, efficiency, and collaboration across the insurance value chain while driving technological innovation. Additionally, the initiative seeks to democratize insurance and enhance its accessibility, affordability, and availability, aligning with the vision of "Insurance for all by 2047."
Draft Regulations
The draft regulations invite comments and suggestions from stakeholders, with a submission deadline set for March 4. According to the proposed norms, Bima Sugam will be established under Section 8 of the Companies Act, 2013, as a not-for-profit company. Shareholding will be distributed among life, general, and health insurers, ensuring no single entity holds a controlling stake.
Governance Structure
IRDAI will nominate two members to the company's board, which will appoint a chairperson and chief executive officer, subject to regulatory approval. Additionally, a risk management committee will be constituted to oversee operational aspects.
Industry Implications
The introduction of Bima Sugam aligns with IRDAI's broader efforts to enhance policyholder protection, increase insurance penetration, and drive overall industry growth. This initiative is particularly significant in light of the evolving regulatory landscape, such as the recent directive on social media guidelines for insurance personnel, which impacts insurtech startups like ACKO, Go Digit, Plum, InsuranceDekho, among others.
