Bima Sugam

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 

Practice question:

1. What do you understand by Bima Sugam? Why it is being pitched as the “UPI moment” for insurance sector?

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