The Insurance Regulatory and Development Authority of India (IRDAI) chairman Debasish Panda said that they are considering a provision that would require a law to be reviewed every three years to keep pace with changing times in the insurance industry.
“We are considering a sunset clause of three years on regulations for policy dynamism,” said Panda at Mint’s 16th Annual Banking, Financial Services and Insurance (BFSI) Summit and Awards 2024. “From 100 odd policy regulations, we are hoping to have 15-odd regulations to streamline industry growth” he said.
Panda also added that they have appointed an expert committee that will look into simplifying the language of the insurance so that it becomes more comprehensible for the citizens who buy insurance policies. He said that a report on this matter will come out soon.
“The insurance industry is categorized for using jargon. We are looking into simplifying the policy document,” said Panda on the topic ‘Insurance’s innovation agenda’.
The insurance regulatory chairman said that they are constantly in touch with insure-techs monthly to understand and take action on innovative steps to drive insurance penetration. He said that they are also in touch with various insurance companies’ CEOs on engagement called Bima Manthan to facilitate direct dialogue with the industry while also setting expectations for them.
Panda also added that Bima Manthan led to the creation of a customer information sheet for health insurance. This includes material details of the health policy and also includes what is included and excluded in the health policy in a simplified manner. This became effective on 1 January 2023.
He said that the Bima Suga platform, a platform being developed for people to buy insurance, would provide the reach and enable them to provide a bouquet of insurance products at the doorstep of the masses. “Bima Sugam, a regulatory electronic marketplace will remove information asymmetry and democratize insurance,” said Panda.
Panda highlighted that the next decade would be paramount for the insurance industry. He stressed that there is a need to build an ecosystem where premiums are no longer one size fits all and are made according to an individual’s risk profiling.
“The evolving landscape demands more freedom which needs regulatory overhaul. We undertook a 360-degree evaluation and it was found that there are hindrances in the industry’s growth even for launching a new product” said Panda.
He added that there is an InsurTech team within IRDAI and insurers are being nudged to adopt the account aggregator framework. He said that 27 insurance companies are already live on the AA ecosystem.
In a bid to further simplify and streamline the insurance sector, another committee has been assessing the ₹60 trillion AUM industry. According to Panda, the aim has been to facilitate ease of doing business, reducing compliance burden while also ensuring the interest of the policyholders is protected.
“The idea was to reduce the number of regulations, move towards a more principle-based approach from the current rule-based one and also towards unified regulations which will be one stop for all regulatory stipulations,” said Panda. “We are hoping that a total of 10 to 11 unified regulations for all the aspects pertaining to the insurance industry sector would be notified before the end of the financial year.”
Panda said that just like how UPI has been a game changer for the payments industry, the JAM trinity, i.e., Aadhar, Pradhan Mantri Jhan Dhan Yojana, and mobile connectively has played a similar role for the BFSI industry which has taken financial inclusion to the last mile. Pradhan Mantri Mudra Yogna added a further fillip, added Panda.
Similarly, for insurance, he said Pradhan Mantri Jeevan Jyoti Beema Yojana and Pradhan Mantri Suraksha Yojana are doing a similar job.
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Published: 11 Jan 2024, 09:39 PM IST