All­-in-­one policy plan to spread insurance in India

Source: The post is based on the article “All­-in-­one policy plan to spread insurance in India” published in The Hindu on 26th May 2023

What is the News?

Insurance Regulatory and Development Authority (IRDA) is devising an affordable product covering health, life, property, and accident risks to give citizens protection, and expedite claim settlements by linking death registries onto one industry platform.

What is the need for an all­-in-­one insurance policy plan?

a) India is a country which has poor insurance penetration, b) A legislative amendment demanded attracting more investments through differentiated licences for niche players similar to the banking sector, and c) IRDA is striving to create a “UPI­-like moment” in insurance through a plan worked out with general and life insurance firms that is termed as “Bima Trinity”.

About the all­-in-­one insurance policy

Aim:

-To give citizens protection against multiple risks, and expedite claim settlements by linking death registries onto a common industry platform.

-To make insurance “available, affordable and accessible” to all citizens with a “gram panchayat­ to district­ to State ­level” approach.

The Bima Trinity of the policy:

A new Bima Sugam platform will integrate insurers and distributors onto one platform to make it a onestop shop for customers. At a later stage customers can pursue service requests and settlement of claims through the same portal.

Bima Vistar: IRDA is simultaneously developing a possible lynchpin product named Bima Vistar. This will be a bundled risk cover for life, health, property and casualties or accidents, with defined benefits for each risk that can be paid out faster than usual without the need for surveyors.

Many States digitising their birth and death registries. The IRDA aims to provide benefits faster (settle claims as fast as six to eight hours or a day at the most) by integrating those registries. This will be a game changer.

Bima Vaahaks(carriers): It is a women-­centric workforce in each Gram Sabha that will meet the women heads of each household to convince them about a composite insurance product like Bima Vistar.

Banks can possibly be given an auto ­debit authority for the premium payments.

Other features:

-To meet the target of providing insurance cover for all by 2047, the IRDA is also looking to form State-level insurance committees similar to the ones prevalent in the banking sector. IRDA will also include State governments to formulate district-­level plans.

What are the expected benefits of the all­-in-­one insurance policy plan?

Households across the country could be able to get a) an affordable single policy that covers health, life, property and accident, b) get their claims settled within hours, and c) secure value-­added services at the time of buying a policy.

The plan could double the number of jobs in the insurance sector to 1.2 crore.

What are the amendments proposed by IRDA to insurance laws?

The current insurance laws do not permit the addition of value-­added services along with an insurance policy. For example, the insurance company cannot add an annual yoga membership or a nursing service for the parents of an insurer living 1,000 km away along with the policy.

So, the IRDA has proposed amendments to the insurance laws that the government should allow differentiated capital requirements for niche insurers so as to attract more investments and permit players to add value-­added services to the policies they sell.