IRDAI approves 8 principle-based regulations
26-03-2024
10:41 AM
1 min read
What’s in today’s article?
- Why in news?
- What is Insurance Regulatory and Development Authority of India (IRDAI)?
- What is Bima Sugam?
- Other approvals made by IRDAI
Why in news?
The Insurance Regulatory and Development Authority of India (IRDAI) has approved eight principle-based regulations including the much-awaited Bima Sugam marketplace.
Insurance Regulatory and Development Authority of India (IRDAI)
- IRDAI is a statutory body formed under an Act of Parliament, i.e., Insurance Regulatory and Development Authority Act, 1999.
- IRDAI's duties include:
- Regulating the insurance business
- Promoting the orderly growth of the insurance business
- Protecting the interests of policyholders
Bima Sugam
- About
- It 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 is health coverage or death claims, in a paperless manner on the basis of policy numbers.
- Benefits of Bima Sugam
- Single window for the policyholder to manage his/her insurance coverage.
- It will provide end-to-end solutions for customers’ insurance needs i.e., purchase, service, and settlement in a seamless manner.
- Empowerment of consumers
- 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.
- Benefits for insurance companies and intermediaries
- It will facilitate insurance companies to access the validated and authentic data from various touch points on a real-time basis.
- The platform will provide interface for the intermediaries and agents to sell policies and provide services to policyholders, among others, and reduce paperwork.
- Universalise and democratise insurance
- IRDAI says Bima Sugam is an electronic marketplace protocol.
- This protocol will be connected with India Stack which is a set of APIs (application programming interface) that allows governments, businesses, startups, etc. to utilise the unique digital infrastructure to enable seamless delivery of services.
- Single window for the policyholder to manage his/her insurance coverage.
Approvals made by IRDAI
- The IRDAI (Bima Sugam – Insurance Electronic Marketplace) Regulations, 2024
- It aims to establish a digital public infrastructure named Bima Sugam.
- It will empower and safeguard policyholders’ interests and achieve the vision of Insurance for all by 2047.
- The IRDAI (Corporate Governance for Insurers) Regulations, 2024
- It aims to establish a robust governance framework for insurers, defining the roles and responsibilities of the board and management.
- This is for the first time that the governance aspects under the existing guidelines are notified in the form of regulations.
- IRDAI (Insurance Products) Regulations, 2024
- It merges six regulations into a unified framework.
- It is aimed at enabling insurers to swiftly respond to evolving market demands, enhancing the ease of conducting business and boosting insurance penetration.
- IRDAI (Registration and Operations of Foreign Reinsurers Branches & Lloyd’s India) Regulations, 2024
- It consolidates two regulations and aims to foster the systematic development of the reinsurance sector in India by promoting orderly growth and harmonizing the existing legal and regulatory framework.
- Other decisions
- IRDAI cleared the regulatory changes under rural, social sector and motor Third-Party (TP) motor insurance.
- For rural obligations, the unit of measurement will now be the gram panchayat.
- The scope of the social sector has been extended to cover cardholders and beneficiaries under various schemes.
- Under Motor TP, the unit of measurement will be the renewal of coverage for goods and passenger-carrying vehicles, as well as tractors.
Q1) What is Third-party (TP) motor insurance?
Third-party (TP) motor insurance, also known as act-only insurance, is a type of liability insurance that protects the owner of a vehicle from claims made by a third party. It's a statutory requirement for all vehicle owners under the Motor Vehicle Act.
Q2) What is corporate governance?
Corporate governance is a set of rules, practices, and processes that direct and control a company. It's the framework of policies and guidelines that inform a company's conduct, decision-making, and practice.