Insurance Regulator Approves Eight Principle-Based Regulations Including Bima Sugam

The Insurance Regulatory and Development Authority of India approved eight principle-based consolidated regulations for the insurance sector leading to a regulatory revamp.

The regulations approved in the 125th board meeting held on March 19, encompass various domains such as safeguarding of policyholders' interests, rural and social sector responsibilities, electronic insurance marketplace, insurance products, and operation of foreign reinsurance branches, as well as aspects of registration, actuarial, finance, investment and corporate governance.

These come after the notification of the first consolidated regulation on Expenses of Management of insurers in January 2024 replacing 34 existing regulations with six regulations and introduction of two new regulations.

IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024

The regulator has revised the minimum business obligations in the rural, social sector, and motor third party business for insurers as mandated under the Insurance Act. 

• The unit of measurement under the rural obligations will now be Gram Panchayat

• The scope of the social sector has been extended to cover cardholders and beneficiaries under various schemes. 

• Under the Motor Third Party Obligations, unit of measurement will be renewal of insurance coverage to goods-carrying vehicles, passenger-carrying vehicles, and tractors.

IRDAI (Bima Sugam - Insurance Electronic Marketplace) Regulations, 2024

Approved establishment of Digital Public Infrastructure named Bima Sugam.

This marketplace serves as a one-stop solution for all insurance stakeholders, including customers, insurers, intermediaries, and agents

IRDAI (Registration, Capital Structure, Transfer of Shares, and Amalgamation of Insurers) Regulations, 2024

This streamlined seven regulations into a single comprehensive framework, to enhance the ease of doing business within the insurance industry.

It simplified various processes, including registration of insurers, transfer of shareholding, capital structure, amalgamation of insurers, and listing of shares on stock exchanges.

IRDAI (Corporate Governance for Insurers) Regulations, 2024

This is the first time that the governance aspects under the existing guidelines are notified in the form of regulation. They aim to establish a robust governance framework for insurers, defining the roles and responsibilities of the board and management, and highlighting the importance of governance in the functioning of an insurance company.

These emphasize transparency, accountability, and ethical conduct.

IRDAI (Insurance Products) Regulations, 2024

These merge six regulations into a unified framework.

These regulations promote good governance in product design and pricing, including strengthening the principles governing guaranteed surrender value and special surrender value along with disclosures thereof.

The regulations encourage the development of innovative insurance products that cater to the requirements of different strata of society.

IRDAI (Registration and Operations of Foreign Reinsurers Branches And Lloyd’s India) Regulations, 2024

This aims to foster the systematic development of the reinsurance sector in India.

These regulations seek to streamline the operations of entities engaged in reinsurance, promote transparency and stability, and create a conducive environment for the growth and expansion of the reinsurance sector.

IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024

This consolidates nine regulations into a single framework focused on enhancing the efficiency and responsiveness of insurers' actuarial, finance, and investment functions.

The objective is the implementation of sound and responsive management practices for the effective discharge of actuarial, finance, and investment functions, safeguarding policyholders' interests, and promoting ease of doing business.

They also emphasize on preparation and reporting of regulatory returns by insurers for transparency and accuracy.

IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024

These regulations focus on several key objectives aimed at ensuring fair treatment of prospects during the solicitation and sale of insurance policies and protecting the interests of policyholders throughout their engagement with insurers and distribution channels.

They also include grievance redressal and policyholder-centric governance.

Also, the regulations ensure that the opening or closing of places of business by insurers, both domestically and internationally, is conducted in a manner that prioritizes the interests of policyholders.