The Insurance Regulatory and Development Authority of India (IRDAI) has approved eight regulations covering a clutch of crucial aspects, from policyholders interests, rural and social sector responsibilities of insurers, corporate governance, and one on the proposed insurance e-marketplace Bima Sugam.
As many as 34 regulations have been replaced with six regulations and two new regulations introduced, after a comprehensive review, to enhance clarity and coherence, the regulator said on Friday on the approvals granted at the 125th authority meeting in Hyderabad earlier this week.
On the IRDAI (Bima Sugam - Insurance Electronic Marketplace) Regulations, 2024, it said the aim was to establish a digital public infrastructure towards universalisation and democratisation of insurance in line with the ‘Insurance for all by 2047’ vision. The marketplace will serve as a one stop solution for all insurance stakeholders, including customers, insurers, intermediaries and agents.
Pitched as UPI moment for insurance in his interaction with the media by IRDAI chairman Debasish Panda, Bima Sugam, along with the women-led distribution channel Bima Vahak and comprehensive insurance cover Bima Vistaar, form the trinity proposed to enhance insurance penetration, especially in the hinterland.
On the IRDAI (Insurance Products) Regulations, 2024, concerning the surrender value on certain life covers among others, the regulator said six regulations had been merged into a unified framework to enable insurers to swiftly respond to evolving market demands, enhance ease of conducting business and boosting insurance penetration. These regulations promote good governance in product design and pricing, including strengthening of the principles governing guaranteed surrender value and special surrender value along with disclosures thereof.
The IRDAI (Rural, Social Sector, and Motor Third Party Obligations) Regulations, 2024 while consolidating existing norms has set Gram Panchayat as the new unit of measurement for insurers’ rural obligations, extends scope of social sector to cover cardholders and beneficiaries under various schemes, and prescribes unit of measurement for motor TP obligations to be renewal of coverage to goods carrying vehicles, passenger carrying vehicles and tractors.
The other regulations encompass pivotal domains such as operation of foreign reinsurance branches as well as aspects of registration, actuarial, finance, investment and corporate governance.
The IRDAI (Registration, Capital Structure, Transfer of Shares & Amalgamation Insurers) Regulations, 2024, streamlines seven regulations into a single comprehensive framework. The aims is to foster growth of the insurance sector by simplifying various processes, including registration, transfer of shareholding, capital structure, amalgamation of insurers and listing of shares and the streamlining is intended to enhance ease of doing business, the regulator said.
Establishing a robust governance framework for insurers, defining roles and responsibilities of the board and management are the focus on the IRDAI (Corporate Governance for Insurers) Regulations, 2024. “This is for the first time the governance aspects under existing guidelines are notified in the form of regulations, which highlights the importance of governance in the functioning of an insurance company,” IRDAI said.
Nine regulations have been consolidated into a single framework to enhance efficiency and responsiveness of insurers’ actuarial, finance, and investment functions under the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, it said. The regulations emphasise the preparation and reporting of regulatory returns in line with applicable standards to ensure transparency and accuracy in assessing the insurance company’s state of affairs thus safeguarding policyholders’ interests and facilitating ease of doing business within the insurance sector.
New health insurer
The March 19th meeting also granted certificate of registration to a new health insurer, Galaxy Health and Allied Insurance Company. With this, the number of insurers operating in health insurance segment has gone up to seven, IRDAI said. It is the sixth registration granted by the regulator in about a year in the life, non-life and health insurance segments.
On the regulatory revamp by IRDAI, Deputy CEO and CFO of Future Generali India Life Insurance Company Alok Rungta hailed the approval for launch of Bima Sugam.
“We also appreciate IRDAI’s perspective on introducing norms to lower surrender charges for early policy termination to make it convenient for customers. However, we are sure the regulator will also consider the efforts and resources of insurance companies that go into servicing a policy through its validity. We trust the IRDAI to decide in the best interests of all parties involved,” he said.
