Recently, the Insurance Regulatory and Development Authority of India (IRDAI) has formed a steering committee to act as the apex decision-making body for the creation of its ambitious ‘Bima Sugam’ online platform.
IRDAI says Bima Sugam is an electronic marketplace protocol which would universalise and democratize insurance. This protocol will be connected with India Stack.
GS III: Indian Economy
Dimensions of the Article:
- Bima Sugam: Simplifying and Digitizing the Insurance Marketplace
- IRDAI: The Regulatory Authority for Insurance
- India Stack: Unlocking Digital Infrastructure for Transformation
Bima Sugam: Simplifying and Digitizing the Insurance Marketplace
Bima Sugam is an online platform that serves as a one-stop solution for insurance needs, offering various schemes from multiple companies.
- Diverse Insurance Options: Customers can select the most suitable insurance scheme from a range of choices offered by different insurance companies.
- Comprehensive Coverage: Bima Sugam caters to all insurance requirements, including life, health, and general insurance like motor and travel coverage.
- Digital Transformation: The platform aims to simplify and digitize the entire insurance process, encompassing policy purchases, renewals, claim settlements, agent services, and policy portability.
- Customer Assistance: Bima Sugam provides support and guidance to customers for all their insurance-related queries and needs.
- Single Window Management: The proposed platform acts as a single window for policyholders to manage their insurance coverage efficiently.
- End-to-End Solutions: It offers complete end-to-end solutions for customers’ insurance requirements, covering purchase, service, and claims settlement.
- Real-Time Data Access: Insurance companies can access validated and authentic data from various sources in real-time, enhancing efficiency.
- Intermediary Support: The platform serves as an interface for intermediaries and agents to sell policies and offer services to policyholders, reducing paperwork.
- Ownership Structure: Life insurance and general insurance companies each own a 47.5% stake in Bima Sugam, with brokers and agent bodies holding a 2.5% stake.
IRDAI: The Regulatory Authority for Insurance
IRDAI, established in 1999, is a statutory regulatory body overseeing the insurance sector with a focus on customer protection.
- Statutory Body: IRDAI operates under the IRDA Act 1999 and falls under the purview of the Ministry of Finance.
- Regulatory Role: Its primary role is to regulate and foster the development of the insurance industry while monitoring insurance-related activities.
- Powers and Functions: The authority’s powers and functions are defined by the IRDAI Act, 1999, and the Insurance Act, 1938. It ensures compliance with industry regulations and safeguards the interests of insurance customers.
India Stack: Unlocking Digital Infrastructure for Transformation
India Stack is a collection of APIs (Application programming interface) designed to provide a digital infrastructure that addresses India’s challenges in delivering presence-less, paperless, and cashless services.
- Solving Complex Problems: India Stack enables governments, businesses, startups, and developers to tackle complex issues by providing digital solutions.
- Economic Primitives: It aims to unlock essential economic elements, including identity, data, and payments, on a massive scale within the population.
- Lower Transaction Costs: Digital transactions facilitated by India Stack often have lower transaction costs compared to traditional methods. This cost reduction benefits businesses, consumers, and the government, making transactions more efficient and affordable.
- Economic Growth and Social Development: India Stack seeks to bridge wealth gaps and create an efficient and resilient digital economy that drives both economic growth and social development.
- Aadhaar: This component is a unique biometric-based identification system that forms a fundamental part of India Stack, providing a robust and secure way to verify individuals’ identities.
- Unified Payments Interface (UPI): UPI is a platform for instant digital payments, making it easier for people to transact digitally, simplifying the payment process.
- Digital Locker: Digital Locker offers secure storage for personal documents, enhancing the convenience and security of accessing important paperwork and certificates.
-Source: The Hindu