Context- The Insurance Regulatory and Development Authority of India (IRDAI) will soon launch Bima Sugam, an online marketplace for buying and selling insurance policies.
What is Bima Sugam?
- It is an online platform where customers can choose the system that suits them from the many options offered by different companies.
- Bima Sugam fulfills all insurance requirements, including life, health and general insurance (including traffic and travel insurance).
- This platform helps settle claims, be it health insurance or death claims, instantly based on policy numbers.
- Steps taken by IRDAI
- IRDAI formed a committee to set up the platform.
- Now it plans to call for proposals soon to appoint a platform service provider. Service providers are technology partners to build and maintain a platform that provides all services in one place.
- Ownership of this platform
- Life and non-life insurance companies each own 47.5 percent, brokers and agent associations each own 2.5 percent.
- Timeline for the launch
- IRDAI initially wanted Bima Sugam to be operational by January 2023, but postponed it to August 1.
- Its introduction has now been pushed back to June 2024.
What is the significance?
- One window for the owner
- The proposed platform would act as a single window where the owner could manage their insurance.
- It offers complete solutions to insurance needs of customers i.e. seamless purchase, maintenance and billing.
- Consumer empowerment
- There are currently hundreds of insurance schemes in the life and non-life insurance sector.
- Customers have no idea who offers the best deal and the pros and cons of different systems.
- Bima Sugam enables them to identify the right system for their customers in one platform.
- Compensation for insurance companies and brokers
- This makes it easy for insurance companies to access verified and authentic data from various touch points in real time.
- Through the platform, brokers and representatives can, among other things, sell insurance and provide services to policyholders and reduce paperwork.
- Universal and democratizing insurance
- IRDAI says Bima Sugam is an electronic marketplace protocol that would universalize and democratize insurance.
- This protocol connects to the India Stack, which is a set of APIs (Application Programming Interface) through which governments, corporations, startups, etc use a unique digital infrastructure to enable seamless delivery of services.
Will the physical mode disappear?
- Customers will open an insurance account and policies are stored in that account, eliminating the need for physical documents.
- Finding the right insurance policy, buying it, settling claims and renewing it is all hassle-free on an online platform.
- The process is mainly through online trading for demat accounts and stock markets.
Insurance Regulatory and Development Authority of India (IRDAI)
- IRDAI is an agency established under the Insurance Regulatory and Development Authority Act, 1999.
- It was established for overall supervision and development of the insurance industry in India.
- The functions of IRDAI include:
- Regulation of the insurance sector
- Encouraging orderly growth of insurance business
- Protection of the interests of policyholders
Source: Indian Express
- What do you understand by Bima Sugam? Why it is being pitched as the “UPI moment” for insurance sector?