Universal cover: On the IRDA’s all-in-one insurance policy

Context:

Last week, the Insurance Regulatory and Development Authority of India unveiled a fresh blueprint to cover a larger portion of the population against risks of adverse shocks, with an eye on ensuring everyone by 2047.

UPI-like moment:

• The lynchpin of this UPI-like moment is envisaged to be a simple, all-in-one insurance policy. 
• Bima Vistaar scheme: Worked out with life and general insurers, would provide households with expeditious monetary support in case of medical emergencies, accidents, thefts or a death in the family. 
• Women-led Gram Sabha-level initiative: With awareness about the benefits of insurance still quite low, the regulator has proposed a women-led Gram Sabha-level initiative to educate every household’s female head about how such a scheme could come in handy at times of distress. 

Enter with ease in the market:

• New Bima Sugam platform: It would integrate insurance players and distributors to give customers a one-stop shop experience to begin with, and facilitate claims servicing going forward.
• Linking States’ digital death registries to the platform, the regulator believes, could enable life insurance claims to be settled within hours or a day at the most.
• It is also on the anvil to ease capital requirement norms and allow a slew of new players to enter the market and serve the untapped needs of niche and specialized segments. 

Unquestionable Step:

• Given the sheer size of India’s population and poor financial literacy levels, the imperative to break from the status quo is unquestionable. 
• The IRDAI’s move to rope in State governments and set up bodies similar to State-level banking committees would help formulate granular district-wise strategies for raising awareness and coverage levels. 

Contribution by playing own roles:

• Industry players: Need to look beyond the top cities.
  • ‘Bima Vistaar’ scheme could catalyze the volumes they need to get out of their comfort zones. 
• Centre:  Needs to rethink the 18% GST levy on health and life insurance premia. 
  • The notion that those who can afford to buy health cover can afford to pay so much tax is untenable in a country where one health calamity can push a household below the poverty line. 
• Continuity: Ensuring continuity of leadership at IRDAI is equally critical.
  • Situations such as the nine-month vacuum at its helm before the current chairperson’s tenure are simply unacceptable.

News Source: The Hindu

DOWNLOAD PDF