In a move to increase insurance accessibility and strengthen governance standards, the Insurance Regulatory and Development Authority of India (IRDAI) has approved eight new principle-based regulations. The regulations were cleared at IRDAI's board meeting and focus on simplifying rules for rural, social sector and motor third party insurance while also establishing a robust governance framework for insurers.
Some of the major reforms introduced include the much-awaited Bima Sugam digital marketplace, merging six insurance product regulations into a unified framework, and notifying corporate governance guidelines for insurers for the first time in the form of regulations.
The Bima Sugam marketplace aims to leverage technology for achieving the vision of “Insurance for All” by 2047 by empowering policyholders and democratizing insurance distribution. The unified insurance products regulations aim to enable insurers to swiftly adapt products based on evolving market needs.
Further, the new norms for rural and social sector insurance have revised the measurement criteria to gram panchayats and expanded insurance scope to cover beneficiaries of various government schemes respectively. For motor third party insurance, renewal will now be based on vehicle type.
Notably, the corporate governance regulations clearly define the roles and responsibilities of insurer boards and management, establishing robust practices. The reinsurance and foreign branch regulations have also been consolidated for systematic development of the reinsurance sector in India.
Through these reforms, IRDAI aims to boost insurance penetration, simplify regulations to support business growth, and usher in strong governance standards for the protection of policyholders. The measures are timely and aligned with India's vision of becoming a $5 trillion economy.
