IRDAI issues draft rules for the governance of online marketplace

As part of the public consultation on the draft regulations for the Bima Sugam, a digital public infrastructure for the insurance sector, the IRDAI has released an exposure draft. Bima Sugam (Insurance Electronic Marketplace) Regulations, 2024 is the proposed title of the regulations. By using this platform, insurance policyholders will be empowered and protected, insurance penetration will increase, and availability, accessibility, and affordability will be enhanced, said the IRDAI.

The platform, named Insurance Electronic Marketplace, aims to benefit policyholders, increase insurance usage, and enhance availability. It is designed to be a one-stop solution for all involved parties, including customers, insurers, intermediaries, and agents, promoting efficiency, collaboration, and technological innovation.

Insurers can offer their products on the marketplace, providing services like policy sales, claim settlement, and grievance redressal. The regulatory framework outlines that Bima Sugam will be a not-for-profit entity with widespread ownership among insurers. IRDAI will nominate two members to the company’s Board, and a Risk Management Committee will be established. The appointment of the chairperson and CEO requires IRDAI approval. The platform will operate on a consent-based system, and consumers will not be charged for its services. The company aims to have a self-sustainable revenue model.

Feedback on the exposure draft is invited until March 4, 2024.