IRDAI issues draft rules for governance of online marketplace

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The IRDAI has released an exposure draft of regulations relating to Bima Sugam, a digital public infrastructure for the insurance industry.

The proposed title of the regulations is “Bima Sugam – Insurance Electronic Marketplace) Regulations, 2024.

The digital platform aims to empower and protect the interests of policyholders, to increase penetration of insurance in India and to enhance availability, accessibility and affordability, said IRDAI.

Bima Sugam shall be a one-stop solution for all insurance stakeholders, including customers, insurers, intermediaries or insurance intermediaries and insurance agents, to promote transparency, efficiency, collaboration across the entire insurance value chain, technological innovation in the insurance sector, universalise and democratise insurance and to achieve the vision of “Insurance for All by 2047”.

Insurers may facilitate availability of their insurance products for sale and provide all services related to an insurance policy including settlement of insurance claims and grievance redressal in the marketplace on an ongoing basis.

Proposed regulatory framework

An outline of the regulatory framework for the establishment, governance, and functioning of the Bima Sugam is as follows:

a) Bima Sugam – Insurance Electronic Marketplace shall be a not-for-profit entity established through a company.

b) The company shall establish, facilitate, develop, operate and maintain the marketplace for providing various services to insurance stakeholders.

c) The shareholdings of the company will be widely held amongst life, general and health insurers, with no single entity having a controlling stake. Shareholders shall contribute to the company’s capital as and when required.

d) IRDAI will nominate two members to the board of the company.

e) The board will constitute a Risk Management Committee to mitigate various risks.

f) Prior approval of the IRDAI is required for the appointment of the chairperson and CEO of the company.

g) The platform shall have a consent-based architecture to deliver services.

h) Consumers shall not be charged for the services of Bima Sugam.

i) The company shall have a revenue model which is self-sustainable.

Feedback on the exposure draft is to be submitted to the IRDAI by 4 March 2024.



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