IRDAI (Bima Sugam – Insurance Electronic Marketplace) Regulations, 2024

Background

The Authority has published IRDAI ( Bima Sugam – Insurance Electronic Marketplace) Regulations , 2024, (‘Bima Sugam Regulation’) in the Gazette of India bearing F. No. IRDAI/Reg/5/199/2024 on March 20, 2024 , with the primary objectives of empowering and safeguarding policyholders, increasing insurance penetration in India, and enhancing accessibility.

The Bima Sugam Regulation aims to establish a Digital Public Infrastructure known as Bima Sugam – Insurance Electronic Marketplace, serving as a comprehensive solution for all insurance stakeholders, including customers, insurers, intermediaries, and insurance agents (‘Company’)

Major highlights of the Bima Sugam Regulation are mentioned hereinunder:

1. Establishment and Shareholding of Bima Sugam – Insurance Electronic Marketplace: The Authority has prescribed certain criteria for the establishment of Bima Sugam which are as follows

• a. Bima Sugam – Insurance Electronic Marketplace shall be established by a not-for-profit company formed under Section 8 of the Companies Act, 2013
• b. The main objective of the Company shall be to establish, facilitate, develop, operate, and maintain a marketplace for providing various services to the insurance stakeholders.
• c. The Company shall file MOA/AOA with the Authority and any amendments to the MOA of the Company shall be undertaken only with the prior approval of the Authority.
• d. The shareholding of the Company shall be widely held amongst Life, General, and Health Insurers with no single entity having a controlling stake.
• e. The services provided by the Company shall be in accordance with the objectives of the Bima Sugam Regulation.

2. Governance: The Constituted Entity to have a well-documented policy, procedures, and governance arrangements such as operational, risk management, and internal controls for its functioning. Further, the Board of the Company has been advised to ensure the following:

a. The Marketplace functions in consonance with the objective of these regulations.

b. The decisions of the Board shall reflect the genuine and legitimate interests of insurance stakeholders.

c. A designed System with a High degree of Security, operational reliability, and adequate and scalable capacity shall be adopted.

d. Appropriate Business Continuity Plan shall be in place.

e. To constitute a Risk Management Committee for handling various functions such as identifying, monitoring, mitigating, and managing various risks.

3. Appointment of Chairperson and Key Managerial Persons (KMPs): The Constituted Entity is proposed to seek prior approval of the Authority for the appointment, re-appointment, termination, and changes in the terms and conditions of the Non-Executive Chairperson, and Managing Director & Chief Executive Officer.

4. Functions, Duties, and Responsibilities: The Company shall perform the functions of the Marketplace as well as facilitate the availability of its products for sale and provide all services related to an insurance policy. The functions prescribed by the Authority are as follows:

a. To create efficient and effective end-to-end digital solutions in accordance with the requirements of Insurance stakeholders and the market.

b. To implement of consent-based architecture for its services.

c. To allow fair and open role-based access to its services.

d. To ensure access to data providers with appropriate consent mechanisms.

e. To store, hold, maintain, share, and/or process any data, in accordance with applicable laws.

5. Security, Privacy, and Participation: The Constituted Entity is proposed to adopt an appropriate security mechanism, advanced technology, and privacy standards in the Marketplace in order to ensure open and fair access.

6. Revenue: The Board of the Constituted Entity is proposed to have a well-documented policy on revenue model which shall be self-sustainable.

A copy of the Bima Sugam Regulation is attached herewith for your reference.

Source category: IRDAI

Attachments

• /2024/369_IRDAI_(Bima_Sugam_-_Insurance_Electronic_Marketplace)_Regulations,_2024_.pdf