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Insurance E-Marketplace: IRDAI Notifies Regulations

In the interest of policyholders, the Insurance Regulatory and Development Authority of India (IRDAI) has notified regulations enabling the setting up of an electronic insurance marketplace called Bima Sugam.

This marketplace is expected to be a one-stop solution for all insurance stakeholders. Under the IRDAI (Bima Sugam – Insurance Electronic Marketplace) Regulations, 2024, the Bima Sugam marketplace has been defined as “a robust Digital Public Infrastructure with open standards and interoperable platforms, enabling seamless integration with various services to facilitate inter alia purchase, sale, servicing of insurance policies, settlement of insurance claims, grievance redressal and other related matters as permitted by the Authority”.

Regulation 4(a) of the 2024 Regulations states that the said marketplace would be established by a not-for-profit company formed under Section 8 of the Companies Act, 2013. As per Regulation 4(d), the company’s shareholding has to be widely held amongst life insurers, general insurers and health insurers, with no single entity having a controlling stake. Further, prior approval has to be mandatorily obtained before any new shares are issued or transmitted, or the transfer of any shares is registered.

Notably, the regulations envisage a self-sustainable revenue model and hence, consumers will not be charged for availing the services of the marketplace.

IRDAI decided to replace 34 regulations with 6 regulations and also introduce 2 new regulations, after holding stakeholder consultations. The decision was taken at the 125th meeting held on March 19, 2024, upon review of the existing regulatory framework.

 

Date: March 25, 2024