Context:
The insurance regulator- Insurance Regulatory and Development Authority of India (IRDA) has issued draft guidelines for Bima Vahak. a dedicated distribution channel to reach out to every Gram Panchayat.
About Bima Vahak:
- Bima Vahak is a dedicated distribution channel to reach out to every Gram Panchayat.
- It is a core component of its ‘Insurance for all by 2047’ goal.
- Key Features:
- Bima Vahaks will gain the trust of locals for the distribution and servicing of insurance products.
- Insurers will remain responsible for ensuring KYC and AML compliance with respect to the policies sourced through the Bima Vahaks.
- Significance:
- It is a part of IRDAI’s plan to improve insurance awareness and penetration in the hinterland
- It will be the crucial last mile connection for insurers in the form of a field force comprising corporate as well individual Bima Vahaks, primarily comprising women.
Bima Sugam:
- Bima Sugam would be a digital platform to:
- innovate, develop, and integrate advanced technologies to automate and digitise the processes for multiple stakeholders.
- Stakeholding Ratio: The equity structure in the platform is set to be a 45:45:10 ratio.
- The life insurance companies will own a 45 per cent stake on an equitable basis.
- General insurance, and standalone health insurance companies owning the other 45 per cent stake.
- Insurance aggregators, agent bodies and service providers will own the rest 10 percent of the total equity.
- One Stop Solution: The online platform, backed by the regulator, the Life Insurance Council and General Insurance Council will allow individuals to fulfil all their insurance needs, right from buying the policy to claim settlement.
Insurance Penetration:
- It is measured as a percentage of total premiums collected to the country’s Gross Domestic Product (GDP).
- It is one of the parameters used to assess the level of development of the insurance sector in a country.
- As per the insurance regulatory body, IRDAI, insurance penetration in India increased from 3.76% in 2019-20 to 4.20% in 2020-21, registering a growth of 11.7%.
Insurance Density:
- It is the ratio of premiums collected by insurance companies to the country’s population.
- The insurance density increased from $78 in 2020-21 to $91 in 2021-22.
| Additional Information
IRDAI:
- IRDAI is a regulatory body created with the aim of protecting the policyholder’s interest.
- It is a statutory body established in 1999, deriving its powers and functions from the IRDAI Act, 1999 and Insurance Act, 1938.
- It works as an autonomous body responsible for managing and regulating the insurance and reinsurance industry in India along with registering and/or licensing insurance, reinsurance companies and intermediaries according to the regulations.
- Purposes of IRDAI:
- To protect the interest of the policyholders.
- To regulate and promote the orderly growth of the insurance and reinsurance industry.
- To ensure speedy claim settlement and prevent insurance frauds and other malpractices.
- To take action when established regulatory standards are ineffectively enforced.
- It also regulates and sees to the development of the insurance industry.
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News Source: The Hindu
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June 3, 2023