Bima Sugam 

21 Sep 2023 Bima Sugam 

This article covers “Daily Current Affairs” and the topic details “Bima Sugam”. This topic has relevance in the “Economy” section of the UPSC CSE exam.

For Prelims:

What is Bima Sugam? 

For Mains:

GS3: Indian Economy 

Why in the news?

The Insurance Regulatory and Development Authority of India (IRDAI) recently organised a steering committee as the ultimate decision-making body for developing its ambitious Bima Sugam platform.

About Bima Sugam 

Bima Sugam is the Insurance Regulatory and Development Authority (IRDAI)’s groundbreaking proposition to establish the world’s first comprehensive online marketplace for insurance products and services. 

• This strategy is intended to eliminate insurance selection and paperwork complexities, representing a transformative moment for the insurance industry.
• The platform is devised to take customers’ decision-making burden by providing various insurance product options from different companies, including life, health, motor, and travel insurance. 
• It aims to be able to streamline claim settlements and list policies paperlessly based on policy numbers.

Operational Framework: 

• To lay the foundation for Bima Sugam, IRDAI has expanded the platform’s budget to Rs 200 crore and formed a committee, with the next step being the appointment of a service provider responsible for creating and running Bima Sugam. 
• The platform is anticipated to function in real-time, granting insurance companies access to validated data and serving as an interface for intermediaries and agents to sell policies and provide services.

Benefits for Customers: 

• Bima Sugam provides an end-to-end solution for customers, significantly reducing paperwork and lowering commission costs. 
• It offers a single platform to identify suitable insurance schemes and seamlessly manage various aspects like purchase, service, and settlement. 
• Claim settlements and renewal will be conducted online. 

Timeline: 

• While initially planned to be functional by January 2023, the launch of Bima Sugam has been postponed to June 2024. 
• When operational, life and general insurance companies will each own approximately 47.5% of the stakes, while brokers and agent bodies will own roughly 2.5% each.

Additional Information: 

Insurance Regulatory and Development Authority of India (IRDAI) 

• IRDAI, established under the Insurance Regulatory and Development Authority of India Act 1999, is an autonomous and statutory entity responsible for overseeing and regulating India’s insurance sector. 
• Its primary objective is to safeguard policyholders’ interests, promote orderly growth, and regulate the insurance industry within the country. 
• The Ministry of Finance is its nodal ministry, and its headquarters are in Hyderabad.
• IRDAI carries out various functions, including:
  • Ensuring fair regulation of the insurance industry while upholding financial stability in compliance with relevant laws and regulations.
  • Periodically formulating regulations for the insurance sector.
  • Registering and overseeing insurance companies, safeguarding the interests of policyholders.
  • Licensing and establishing norms for insurance intermediaries.
  • Encouraging the development of professional organisations within the insurance sector.
  • Regulating and supervising premium rates and terms for non-life insurance policies.
  • Specifying financial reporting norms for insurance companies.
  • Regulating the investment of policyholders’ funds by insurance companies.
  • Ensuring that insurance companies maintain the required solvency margin.
  • Extending insurance coverage to rural areas and vulnerable segments of society.

Sources: IRDAI plans committee to create Bima Sugam platform, to appoint project consultant

Download Yojna daily current affairs eng med 21st Sep 2023

Q1. With reference to Bima Sugam, consider the following statements: 

1. Bima Sugam is a platform developed by the Insurance Regulatory and Development Authority of India (IRDAI) to serve as an online marketplace for various insurance policies.
2. The Bima Sugam platform will offer an end-to-end solution for customers’ insurance needs, including purchase, service, and settlement.
3. The development of the Bima Sugam platform is expected to be completed by June 2024.

Which of the statements given above is/are NOT correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 3 only 

(d) None 

Answer: (d) 

Q2. Consider the following:

1. The Insurance Regulatory and Development Authority of India is a body under the jurisdiction of the Ministry of Commerce.
2. Ensuring insurance coverage in rural areas and vulnerable sections of society is one of the objectives of IRDAI. 
3. It is an autonomous and statutory body established under the IRDA Act 1999.

How many of the abovementioned statements are correct?

(a) Only one 

(b) Only two 

(c) All three 

(d) None 

Answer: (b)

Q3. Discuss the role of the Insurance Regulatory and Development Authority of India (IRDAI) in developing and regulating the insurance sector in India.

Gaurav N