Bima Sugam: IRDAI's 2024 regulations for a single digital insurance marketplace
IRDAI's Bima Sugam Regulations 2024, gazetted on 21 March 2024, create a section 8 company to run one national insurance marketplace. What the 14 regulations require, and what they do not.
India's insurance regulator spent the 2023-24 financial year collapsing dozens of scattered rulebooks into a handful of principle-based ones. On 19 March 2024, at its 125th meeting in Hyderabad, the Authority cleared eight consolidated regulations in a single sitting. One of the eight did something the other seven did not: it created a new institution.
That regulation is the Insurance Regulatory and Development Authority of India (Bima Sugam - Insurance Electronic Marketplace) Regulations, 2024, notified at Hyderabad on 20 March 2024 under F. No. IRDAI/Reg/5/199/2024 and published in the Gazette of India, Part III, Section 4, No. 192, on 21 March 2024. It runs to just 14 regulations across six chapters. Within those 14 regulations sits the legal architecture for a single national marketplace through which an Indian household is meant to buy, service and claim on every insurance policy it owns.
The Rule: what the Bima Sugam Regulations 2024 actually say
The regulations were issued under three separate statutory hooks: clause (zd) of sub-section (2) of section 114A of the Insurance Act, 1938, and clause (e) of sub-section (2) of section 14 together with clause (e) of sub-section (2) of section 26 of the IRDA Act, 1999. They were framed in consultation with the Insurance Advisory Committee and signed by the then Chairperson, Debasish Panda. Regulation 1(b) brings them into force from the date of gazette publication, which fixes commencement at 21 March 2024.
Regulation 2(a) sets out the purpose in one sentence: to permit establishment of "a Digital Public Infrastructure called Bima Sugam - Insurance Electronic Marketplace", described as a one-stop solution for consumers, insurers, intermediaries and insurance agents, in service of the stated goal of "Insurance for all by 2047". Regulation 2(b) is candid that only broad principles have been laid down, and that the Competent Authority may issue guidelines and circulars as the Marketplace requires.
Four definitions in Regulation 3 do most of the heavy lifting. A "Consumer" covers a prospect, policyholder, insured, nominee, beneficiary and claimant, so a nominee pursuing a death claim has standing in her own right. The "Marketplace" is defined as a Digital Public Infrastructure with open standards and interoperable platforms covering purchase, sale, servicing, claim settlement and grievance redressal. A "Data Provider" includes Central and State Government entities, five of which are named on the face of the regulation: UIDAI, DigiLocker, Parivahan, the Central KYC Record Registry and CBDT. "Insurance Stakeholders" captures consumers, insurers, intermediaries and agents plus any other service provider the Authority permits.
Chapter II is the structural core. Regulation 4(a) requires the Marketplace to be established by a not-for-profit company formed under section 8 of the Companies Act, 2013, and adds a proviso with real teeth: no other person shall commence or operate with the same or similar objectives. Regulation 4(d) requires the shareholding to be widely held among life insurers, general insurers and health insurers, with no single entity holding a controlling stake, and bars any issue or transfer of shares without prior approval of the Competent Authority. Regulation 4(e) obliges shareholders to fund the capital requirement on an ongoing basis.
Governance is handled in Regulations 5 and 6. The company must carry board-approved policies covering operations, risk management and internal controls, and must accommodate up to two IRDAI nominees on its board. Its board must constitute a Risk Management Committee covering third-party service providers, and must obtain prior IRDAI approval for the appointment, re-appointment, termination or change in terms of two posts specifically: the Non-Executive Chairperson, and the Managing Director and Chief Executive Officer.
| Chapter | Regulations | What it governs |
|---|---|---|
| I - Preliminary | 1 to 3 | Short title, commencement on gazette date, objectives, definitions |
| II - Establishment, Shareholding and Governance | 4 to 6 | Section 8 company, widely held shareholding, board policies, two IRDAI nominees, KMP approvals |
| III - Functions, Duties and Responsibilities | 7 to 8 | Nine functions of the company, duty on insurers to service and settle claims on the platform |
| IV - Security and Privacy | 9 | Security mechanisms, privacy standards, participation protocols |
| V - Self Sustainable | 10 | Board-approved revenue policy; consumers not to be charged |
| VI - Miscellaneous | 11 to 14 | Inspection powers, penalties, power to issue circulars, power to remove difficulties |
Regulation 7 lists nine functions, lettered (a) to (i). Three of them matter most to a policyholder. Clause (b) requires a consent-based architecture for all services. Clause (c) requires fair and open role-based access. Clause (d) requires the Marketplace to be operative and accessible at all times, which is an availability obligation written into subordinate legislation rather than a service-level promise in a vendor contract.
Regulation 8 is the shortest operative provision and the most consequential. Insurers "shall endeavor to facilitate availability of their insurance products for sale" on the Marketplace, but they "shall necessarily provide all services related to an insurance policy including settlement of insurance claims, grievance redressal in the Marketplace on an ongoing basis". The drafting distinction is deliberate: selling on the platform is an endeavour, servicing and claim settlement on the platform is a requirement.
Why It Matters
For a household, the change Regulation 8 contemplates is arithmetic first. A family holding a term plan, a family floater, a motor policy and an endowment policy across four different insurers deals today with four portals, four sets of credentials, four claim intimation routes and four grievance queues. Regulation 8 requires all four insurers to deliver servicing, claim settlement and grievance redressal through one Marketplace.
The consent architecture in Regulation 7(b), read with the Data Provider definition in Regulation 3(1)(g), is the second change. Five named government sources, UIDAI, DigiLocker, Parivahan, the Central KYC Record Registry and CBDT, can be tapped with consumer consent. In practice that is the difference between re-uploading the same identity and vehicle documents to each insurer and authorising a single pull.
Regulation 10(b) settles the fee question in nine words: "Consumers shall not be charged for availing the services of the Market place." There is no proviso, no de minimis carve-out and no sunset. Regulation 10(a) requires the company to run a board-approved self-sustainable revenue model, and Regulation 4(e) puts the ongoing capital burden on the insurer shareholders. The cost of the infrastructure therefore sits with the industry, not the buyer.
The exclusivity proviso under Regulation 4(a) is worth reading twice. Because no other person may operate with the same or similar objectives, this is not a licensing regime with multiple competing marketplaces. It is a single statutory utility, closer in design to a public registry than to a comparison website.
Worked Numbers
Start with the only figure the regulation itself fixes. Under Regulation 10(b) the consumer-facing charge for using the Marketplace is Rs 0. Trace where that Rs 0 goes and the cost chain in Chapter V and Regulation 4(e) becomes visible.
| Party | Obligation under the 2024 Regulations | Amount fixed by the regulation |
|---|---|---|
| Consumer | Uses purchase, servicing, claim and grievance services | Rs 0 (Regulation 10(b)) |
| Company | Runs a board-approved self-sustainable revenue model | Not specified; policy-driven (Regulation 10(a)) |
| Insurer shareholders | Contribute capital on an ongoing basis for upgradation | Not specified; ongoing obligation (Regulation 4(e)) |
| IRDAI | Up to two nominees on the board; prior approval for share transfers and two KMP posts | 2 board nominees (Regulation 5(1)(b)) |
Now the policyholder side, with the inputs stated openly. Take a 35-year-old buying a term policy with a sum assured of Rs 1,00,00,000 and a policy term of 30 years. Assume, purely as an illustration and not as a quoted rate, an annual premium of Rs 12,000. Total premium outgo across 30 years is 30 multiplied by Rs 12,000, or Rs 3,60,000. The ratio of sum assured to lifetime premium is Rs 1,00,00,000 divided by Rs 3,60,000, which is 27.8 times. Run your own age and cover through the term insurance premium calculator rather than relying on the illustrative Rs 12,000 above.
What that 30-year figure means for Bima Sugam is servicing duration. Under Regulation 8 every address change, nominee change and the final claim across those 30 years must be available through the Marketplace, because the duty is expressed as an obligation "on an ongoing basis".
Apply the same arithmetic to health cover. A family floater renewed annually for 20 years involves 20 renewal decisions and 20 chances for a waiting period clock to reset on a lapse. Test that on the health insurance premium calculator, and for unit-linked plans see the ULIP versus mutual fund comparison.
One number the regulation does not contain is a go-live date. Regulation 1(b) fixes commencement of the regulations at gazette publication on 21 March 2024. Nothing in the 14 regulations sets a deadline for the Marketplace itself to become operational; Regulation 13 leaves the operational timetable to circulars, guidelines and directions issued by the Competent Authority. Any specific launch date you encounter comes from a later instrument, not from the 2024 Regulations.
Pitfalls
Treating Bima Sugam as a price comparison site. Regulation 2(a) describes a one-stop solution across the insurance value chain, and Regulation 7 lists nine functions covering data access, consent, role-based access and availability. Comparison is not among the nine. The design is infrastructure, not a shopping engine.
Assuming every product will be on sale there. Regulation 8 splits the duty in two. Availability of products for sale is framed as something insurers "shall endeavor" to facilitate. Only servicing, claim settlement and grievance redressal are framed with "shall necessarily". A product missing from the sale listing is not automatically a breach; a claim that cannot be pursued there is a different matter.
Expecting policy wordings to change. Nothing in the 14 regulations touches sub-limits, room rent caps, co-payment clauses or pre-existing disease waiting periods. Those sit in the product and policyholder-protection regulations cleared at the same 19 March 2024 meeting, not in the Marketplace regulations. Our earlier piece on the Policyholders' Interests Regulations 2024 covers that rulebook, and the Master Circular on life products covers the free-look and policy loan changes.
Believing consent is automatic. Regulation 7(b) requires a consent-based architecture and Regulation 7(e) requires access to data providers "with appropriate consent mechanism". Consent is the gate, which means a consumer who does not grant it will still be filling in a proposal form manually. The five named data providers under Regulation 3(1)(g) are sources the consumer authorises, not sources the platform simply reads.
Assuming the platform replaces the insurer or the TPA. Regulation 8 places the servicing duty on insurers. The Marketplace is the channel; the contractual counterparty on a health claim remains the insurer and, where appointed, its TPA. A repudiation delivered through the Marketplace is still a repudiation by the insurer and is challenged on the same grounds it always was.
Reading Regulation 10(b) as a promise of cheaper premiums. The provision says consumers shall not be charged for availing the services of the Marketplace. It says nothing about premium levels, commission structures or distribution costs, all of which are governed elsewhere. Zero platform fee and lower premium are two different claims.
FAQ
When did the Bima Sugam Regulations 2024 come into force?
Regulation 1(b) states that the regulations come into force from the date of their publication in the official gazette. That publication is dated 21 March 2024, in the Gazette of India, Extraordinary, Part III, Section 4, No. 192. The notification itself is dated 20 March 2024 at Hyderabad, and the Authority approved the regulations at its 125th meeting on 19 March 2024.
Who owns the Bima Sugam company?
Regulation 4(a) requires a not-for-profit company under section 8 of the Companies Act, 2013. Regulation 4(d) requires its shareholding to be widely held among life insurers, general insurers and health insurers, with no single entity having a controlling stake, and requires prior approval of the Competent Authority before any new shares are issued or any transfer is registered. Under Regulation 5(1)(b) the board may include up to two IRDAI nominees.
Will using Bima Sugam cost me anything?
No. Regulation 10(b) states that consumers shall not be charged for availing the services of the Marketplace. Under Regulation 10(a) the company must operate a board-approved self-sustainable revenue model, and under Regulation 4(e) the insurer shareholders must contribute capital on an ongoing basis for continuous upgradation.
Are insurers compelled to sell policies on Bima Sugam?
Not in the same terms. Regulation 8 says insurers "shall endeavor to facilitate availability" of their products for sale, but that they "shall necessarily provide all services related to an insurance policy including settlement of insurance claims, grievance redressal in the Marketplace on an ongoing basis". Sale is an endeavour; servicing, claims and grievance redressal are mandatory.
Which government databases can Bima Sugam draw on?
Regulation 3(1)(g) defines a Data Provider to include Central or State Government entities and names five: UIDAI, DigiLocker, Parivahan, the Central KYC Record Registry and CBDT. It also covers any other entity holding data and making it available. Access is subject to the consent mechanism required by Regulations 7(b) and 7(e).
Can a nominee use the platform, or only the policyholder?
Regulation 3(1)(d) defines "Consumer" to include a prospect, policyholder, insured, nominee, beneficiary and claimant in relation to an insurance policy. A nominee therefore falls within the class the regulations are drafted to serve, which matters because Regulation 8 requires claim settlement to be provided through the Marketplace.
What happens if the company breaches these regulations?
Regulation 11 empowers the Authority to conduct an enquiry, investigation or inspection of the books of accounts, records, documents, infrastructure, systems and procedures of the company, which must provide access and information. Regulation 12 permits the Authority to initiate action against the company or regulated entities for violations of the 2024 Regulations, the Insurance Act, 1938, the IRDA Act, 1999 and any circular, guideline or order issued under them.
If your claim or servicing request goes nowhere
The 2024 Regulations build a channel; they do not remove your existing escalation rights. If an insurer fails to act on a claim or a grievance, the statutory consumer route remains open: the National Consumer Helpline on 1915, and the e-Daakhil portal at edaakhil.nic.in for filing a consumer complaint electronically. If the problem is a fraudulent website or fake insurance app rather than a genuine insurer, report it at cybercrime.gov.in or on helpline 1930 within the golden hour.
Read the primary text before relying on any secondary summary. The gazetted regulations are published in full by the regulator at irdai.gov.in, and the Authority's own press note on the 19 March 2024 regulatory revamp, which lists all eight consolidated regulations cleared that day, is at irdai.gov.in.