The Insurance Regulatory and Development Authority of India (IRDAI) recently unveiled its latest advancement – the formation of a steering committee to act as the principal decision-making entity for developing ‘Bima Sugam’. This initiative is an electronic marketplace protocol aiming to democratize and universalize insurance.
Bima Sugam is designed to connect with India Stack, furthering its reach and utility. The platform is envisioned as a multi-purpose online hub where customers can compare various insurance schemes offered by different companies and select the one that best fits their needs. This system intends to cater to all insurance requirements including life, health, general insurance such as motor and travel policies.
Functionality and Features of Bima Sugam
The online platform aims to digitize and simplify the insurance marketplace. It offers an array of services from buying policies, renewing them, settling claim settlements, to facilitating the portability of agents and policies. Moreover, it’s designed as a single access point for policyholders to manage their insurance coverage.
Bima Sugam provides comprehensive solutions for customers’ insurance needs which include purchasing, servicing, and settling. In addition, it aims at minimizing paperwork by allowing intermediaries and agents to sell policies and deliver services to policyholders through this platform.
Stakeholders Involved in Bima Sugam
The stakes in the Bima Sugam platform are distributed among life insurance and general insurance companies with 47.5% each, whereas brokers and agent bodies hold 2.5% each.
About IRDAI
Founded in 1999, the IRDAI is a regulatory body established with the objective of safeguarding the interests of insurance customers. As a statutory entity under the IRDA Act 1999, it falls under the jurisdiction of the Ministry of Finance. The body oversees the development and regulation of the insurance industry along with monitoring related activities. The IRDAI Act 1999 and Insurance Act 1938 lay down its powers and functions.
Understanding India Stack
India Stack is a set of APIs (Application Programming Interface) that facilitates governments, businesses, startups, and developers to utilize a unique digital infrastructure to resolve India’s challenging issues towards presence-less, paperless, and cashless service delivery. It intends to unlock the economic primitives of identity, data, and payments at a population scale.
Digital transactions conducted via India Stack generally have lower costs compared to traditional methods, resulting in savings for businesses, consumers, and the government. It aims to bridge wealth gaps and foster an efficient, resilient digital economy that promotes economic growth and social development.
The key components of India Stack include Aadhaar (a unique biometric-based identification system), Unified Payments Interface (UPI) for instant digital payments, and Digital Locker for secure storage of personal documents.
UPSC Civil Services Examination Question
A question that was featured in the 2018 prelims was focused on the Aadhaar card. The question asked which statements were correct from: the Aadhaar card can be used as a proof of citizenship, and the Aadhaar number cannot be deactivated by the Issuing Authority. The answer was neither statement was correct.
This reflects the position of the Government of India and UIDAI that Aadhaar is not proof of citizenship. According to them, Aadhaar helps service providers authenticate the identity of residents electronically which makes service delivery more cost-effective and efficient.
