Stories
IRDAI Pushes Digital Platforms to Revolutionize Insurance Buying, Boost Competition
- •IRDAI proposes encouraging more digital platforms to simplify insurance purchases for customers and foster a level playing field for insurers.
- •Bima Sugam is identified as a key market infrastructure institution (MII), with most insurers as shareholders, expected to offer a wide range of insurance products.
- •IRDAI envisions additional not-for-profit platforms with broad insurer participation, requiring at least 11 insurers to establish an MII with no single entity holding significant control.
- •These platforms would receive preferred distribution status due to their low-cost, neutral digital insurance buying experience, with transparent and significantly lower fee structures.
- •The Public Insurance Registry (PIR) is proposed as another MII, a national digital system to help customer-facing platforms like Bima Sugam find, verify, and exchange insurance-related information, shifting insurance from a 'sold' to a 'bought' model.
Key Questions Answered
Bima Sugam is a market infrastructure institution (MII) and digital platform set up by the Bima Sugam India Federation to make it easier for customers to buy life and general insurance. It is designed as a unified digital marketplace allowing customers to seamlessly buy, service, and claim policies directly without relying on traditional intermediaries.
At least 11 insurers must come together to set up an MII, with no single insurer allowed to hold significant control. While a lead promoter can hold up to 20% initially to run the platform, this share must drop to 15% within five years and below 10% within seven years.
The Public Insurance Registry (PIR) is a national digital system and consent-driven data repository designed to store policyholder data across insurers. It helps customer-facing platforms like Bima Sugam find, verify, and exchange insurance information to improve market efficiency and reduce fraud.
