Govt to set up Bima Sugam Portal to address existing protection gap across General Insurance Business

The government has said that it proposes to set up a Bima Sugam portal to address the existing protection gap across life, health and general insurance businesses in the country. Replying to a question in the Lok Sabha, Finance Minister Nirmala Sitharaman said that the Insurance Regulatory and Development Authority of India (IRDAI) has informed that the portal will be an insurance market infrastructure, where insurers, distribution networks and the policy holders would virtually meet across a seamless digital platform.

She said the portal is expected to improve accessibility and ease of insurance purchase to policyholders. This will also serve as a readymade digital platform for insurers and distribution networks. The initiatives taken by the Government to protect the interest of General Insurance Agents and Life Insurance Agents when this new policy is implemented in insurance sector.

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Insurance Sector in India:

• The whole general insurance sector in India was nationalised by the Government of India by taking over of shares of more than 50 Indian insurance companies and undertakings of 52 insurers carrying general insurance business in India. This sector was nationalised by the General Insurance Business ( Nationalisation ) Act,1972.
• However, the insurance business was evolving India, many problems were thriving simultaneously which needed to be dealt with. Following this, the Government of India set up the Malhotra Committee under the chairmanship of R.N Malhotra to suggest reforms for the insurance sector in India. Following the recommendations of the Malhotra Committee, the Insurance Regulatory and Development Authority (IRDA) was established in1999 to regulate and develop the insurance sector in India.

Types of insurance in India:

Life insurance:

Life insurance policies deal with coverage against unfortunate events like death or disability of the policyholder.

Examples:-

• Term Life Insurance
• Whole Life Insurance
• Endowment Plans
• Unit –Linked Insurance Plans
• Child Plans
• Pension Plans

General insurance:

General insurance plans comprise of other forms of insurances which offer coverage against other unfortunate events and loss except for the death of the policyholder.

Examples:-

• Motor Insurance
• Home Insurance
• Fire Insurance
• Travel Insurance.