Insurers are encouraged to make their insurance products available for sale and offer all related services, such as claims settlement and grievance resolution, within the marketplace on an ongoing basis, as stated in the exposure draft.
The Insurance Regulatory and Development Authority (IRDAI) has unveiled an exposure draft proposal for an insurance electronic marketplace called Bima Sugam. This platform aims to serve as a central hub for all insurance-related activities, catering to customers, insurers, intermediaries, and insurance agents alike.
Bima Sugam is poised to become a one-stop solution for all insurance stakeholders, including customers, insurers, intermediaries, and agents, according to an Irdai exposure draft issued on February 13. Its overarching goal is to promote transparency, efficiency, and collaboration throughout the insurance value chain, leveraging technological innovation to universalize and democratize insurance access. In his interactions with the media, Debasish Panda, Irdai chairman, highlighted Bima Sugam as the UPI moment for insurance. Positioned as one part of the Bima trinity, Bima Sugam aims to empower and safeguard the interests of policyholders while boosting insurance penetration and improving availability, accessibility, and affordability. Also, it offers the potential to achieve the vision of “Insurance for all by 2047” in India.
Mayank Gupta, Chief Operating Officer (COO) and co-founder at Zopper said, “Embracing the dawn of digital transformation in insurance, we stand poised to lead the charge towards a future where Bima Sugam will become the cornerstone of accessibility, transparency, and innovation. Providing a common platform for insurers, intermediaries, and customers alike, will foster an ecosystem where InsurTech players can thrive. The availability of a centralized database in the future will mean that InsurTech firms can leverage rich, standardized data to develop tailored solutions that will meet the evolving needs of consumers across various demographics."
"Moreover, the standard API integration will expose InsurTech players to multiple products from all categories, facilitating seamless interaction and interoperability. This interconnectedness will also enhance efficiency and become a source of creativity, allowing InsurTech firms to create holistic solutions that transcend traditional boundaries,” he said.
“As we embrace the potential of Bima Sugam, we also recognize the immense responsibility and opportunity it will bring to the table. By harnessing the power of technology, collaboration, and innovation, we will be able to propel the insurance industry towards greater accessibility, transparency, and customer-centricity in the future," he added.
Here are the proposed guidelines for the establishment, governance, and functioning of the Bima Sugam - an insurance electronic marketplace:
Not-For-Profit Structure: Bima Sugam will operate as a not-for-profit company under Section 8 of the Companies Act, 2013, ensuring its primary focus remains on serving the interests of policyholders rather than maximizing profits.
Multi-Stakeholder Ownership: The shareholding of Bima Sugam will be widely held among life, general, and health insurers, with no single entity holding a controlling stake. This ensures a balanced and collaborative approach towards decision-making and operations.
Regulatory Oversight: Irdai will play a crucial role in overseeing Bima Sugam's governance and operations. The authority will nominate two members to the company's board and provide prior approval for the appointment of the Chairperson & CEO, ensuring regulatory compliance and alignment with broader industry objectives.
Risk Management: Bima Sugam will establish a dedicated risk management committee to identify and mitigate various risks associated with its operations, ensuring the security and stability of the marketplace.
Consent-Based Architecture: The platform will operate on a consent-based architecture, ensuring that users have control over their data and interactions within the marketplace, thereby enhancing trust and privacy.
Free Services For Consumers: Perhaps most importantly, consumers will not be charged for availing services through Bima Sugam, making insurance products and services more accessible to individuals across diverse socio-economic backgrounds.
According to experts, the introduction of Bima Sugam heralds a new era of consumer-centricity and inclusivity in India's insurance sector