Bima Sugam Marketplace

March 26, 2024

The Insurance Regulatory and Development Authority of India (IRDAI) has approved eight principle-based regulations, including the highly anticipated Bima Sugam marketplace, in its recent board meeting. The regulatory changes cover various aspects of the insurance industry, such as rural and social sector obligations, motor Third-Party (TP) insurance, corporate governance, and foreign reinsurers’ operations in India.

Bima Sugam Marketplace

The IRDAI (Bima Sugam – Insurance Electronic Marketplace) Regulations, 2024, aim to establish a digital public infrastructure named Bima Sugam. The primary objectives of this marketplace are:

Universalization and democratization of insurance
Empowering and safeguarding policyholders’ interests
Achieving the vision of “Insurance for all by 2047”

Bima Sugam will serve as a one-stop solution for all insurance stakeholders, including customers, insurers, intermediaries, and agents.

Rural and Social Sector Obligations

Under the new regulations, the unit of measurement for rural obligations will now be the gram panchayat. The scope of the social sector has been extended to cover cardholders and beneficiaries under various schemes, ensuring a wider reach of insurance services to the underprivileged sections of society.

Motor Third-Party Insurance

For Motor TP insurance, the unit of measurement will be the renewal of coverage for goods and passenger-carrying vehicles, as well as tractors. This change is expected to streamline the process of measuring compliance with Motor TP insurance requirements.

Corporate Governance for Insurers

The IRDAI (Corporate Governance for Insurers) Regulations, 2024, aim to establish a robust governance framework for insurers by defining the roles and responsibilities of the board and management. This is the first time that governance aspects under the existing guidelines have been notified in the form of regulations, highlighting the importance of governance in the functioning of an insurance company.

Insurance Products Regulations

The IRDAI (Insurance Products) Regulations, 2024, merge six existing regulations into a unified framework. The objectives of these regulations are:

Enabling insurers to swiftly respond to evolving market demands
Enhancing the ease of conducting business
Boosting insurance penetration
Foreign Reinsurers and Lloyd’s India

The IRDAI (Registration and Operations of Foreign Reinsurers Branches & Lloyd’s India) Regulations, 2024, consolidate two existing regulations. These regulations aim to foster the systematic development of the reinsurance sector in India by promoting orderly growth and harmonizing the existing legal and regulatory framework.

Important Facts for Exams

IRDAI was established in 1999 as an autonomous, statutory body to regulate and promote the insurance industry in India.
The Bima Sugam marketplace is expected to revolutionize the way insurance is bought and sold in India, making it more accessible and transparent for consumers.
The new regulations replace 34 existing regulations, streamlining the regulatory framework for the insurance industry.
The emphasis on corporate governance in the new regulations underscores the importance of transparency and accountability in the insurance sector.

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