The Insurance Regulatory and Development Authority of India (IRDAI) has approved the establishment of Bima Sugam, an online insurance marketplace, aimed at simplifying the process of buying, selling, and servicing insurance policies, as well as settling claims.
Key Features of Bima Sugam
- Bima Sugam 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’s health coverage or death claims, in a paperless manner on the basis of policy numbers.
- Details about insurance schemes are expected to be stored in the platform through the insurance repository initially. This will be followed by a listing of policies.
The Role of Bima Sugam in Insurance Management
- 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 needse., purchase, service, and settlement in a seamless manner.
- 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.
- Commissions on policies are expected to come down, benefiting the customers. The cost of buying policies will come down eventually
- 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.
- They have to spend time talking to agents and visiting the websites of different insurers to select a suitable scheme.
How Bima Sugam Will Be Implemented
- Bima Sugam shall be established by a not-for-profit company formed under Section 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.
- Shareholding in the company will be widely held among life, general, and health insurers.
- No single entity has a controlling stake. Shareholders shall contribute to capital as and when required.
- IRDAI would nominate up to two members on the board of the company.
- The board shall constitute a risk management committee to mitigate various risks.
- The company shall seek prior approval of authority for the appointment of the chairperson and CEO of the company.
- The Company shall have a Board approved policy on a self-sustainable revenue model. Consumers shall not be charged for availing services from Bima Sugam.
What is IRDAI?
- Insurance Regulatory and Development Authority (IrDA) is an autonomous, apex and statutory body which regulates and develops the insurance industry in India.
- It was established under IrDA act 1999, which was passed on the recommendation of the Malhotra Committee report of 1994.
- IRDA began functioning in April 2000. This agency operates from its headquarters at Hyderabad, where it was shifted from Delhi in 2001
Functions Of IRDA
- Protect the rights of policy holders
- Provide registration certification to life insurance companies
- Renew, Modify, Cancel or Suspend this registration certificate as and when appropriate.
- Promoting efficiency in the conduct of insurance business;
- Promoting and regulating professional organisations connected with the insurance and re-insurance business
- Regulating investment of funds by insurance companies;
- Adjudication of disputes between insurers and intermediaries or insurance intermediaries;
Conclusion
The launch of Bima Sugam represents a transformative shift in how insurance is managed in India. By providing a centralized online platform that offers easy access to various insurance schemes, paperless claim settlements, and reduced commissions, Bima Sugam is set to revolutionize the industry.
For both customers and insurers, this digital marketplace simplifies the process, making it easier to navigate the world of insurance and find the best solutions to meet diverse needs.
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