IRDAI Introduces Bima Vahak to Tap Rural Insurance Market

The Insurance Regulatory and Development Authority of India (IRDAI) has launched a new business model, known as ‘Bima Vahak,’ to cater to rural markets. This new distribution channel aims to provide life and general insurance policies at the gram panchayat level through the use of handheld electronic devices.

Facilitating Access to Insurance in Rural Areas

Under the Bima Vahak initiative, anyone can become an individual or corporate Bima Vahak to distribute specified insurance policies available on the ‘Bima Vistaar’ digital platform. This platform allows agents to onboard new clients and facilitate claim requests entirely online. However, it is important to note that IRDAI will approve the policies that can be sold under this platform.
Existing intermediaries now have the opportunity to become corporate Bima Vahaks and distribute insurance policies in rural areas. Furthermore, they can appoint individual Bima Vahaks as sub-distributors in these locations, expanding the reach of insurance services.

Key Aspects of the Bima Vahak Initiative

Let’s take a closer look at the key highlights of this initiative:

1. Appointment of Bima Vahaks: Both insurers and corporate Bima Vahaks have the authority to appoint individual Bima Vahaks.
2. Responsibility: Bima Vahaks, along with the insurer, will be responsible for the actions and conduct of sub-brokers.
3. Service Fees and Commission: While Bima Vahaks cannot charge a fee for their services, they are entitled to receive commission payments.
4. Sales, KYC, and Claim Facilitation: Bima Vahaks can sell insurance policies, carry out KYC verification, and assist in claim servicing.
5. Encouraging Women Entrepreneurs: The distribution business aims to encourage women to actively participate and take up entrepreneurial opportunities.
6. Partnerships with Insurance Providers: Individual Bima Vahaks can tie up with one life insurance, one non-life insurance, one standalone health insurance, and one agriculture insurance provider.
7. Defined Terms and Conditions: Insurance councils, such as the Life Insurance Council and General Insurance Council, will establish terms and conditions, education standards, and a code of conduct for Bima Vahaks.
8. Seamless Transition: If a Bima Vahak leaves the occupation, the policies serviced by them will be transferred to another Bima Vahak within the same territory, ensuring uninterrupted service for policyholders.
9. Corporate Bima Vahak Exit: In the event of the exit of a corporate Bima Vahak, insurers will be obliged to ensure uninterrupted service to policyholders.
10. Identification and Compliance: Insurers will issue physical identification cards to individual Bima Vahaks, including the Bima Vahak’s name, name of the appointing insurer, and the contact details of the branch office. These cards will also include the contact details of the grievance redressal officer and the insurance ombudsman.
11. Handling Complaints: Insurers must identify the nearest local branch office to handle complaints effectively, ensuring prompt resolution.

It is important to note that the Bima Vahak initiative will be implemented following the launch of the Bima Vistaar platform, as clarified by IRDAI.

Enhancing Access to Insurance Services in Rural Areas

The introduction of the Bima Vahak business model by IRDAI marks a significant step towards extending insurance coverage to underserved rural populations. By leveraging digital technology and empowering intermediaries, this initiative aims to bridge the insurance gap and create a more inclusive insurance ecosystem.

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