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IRDAI Chairman Proposes Three-Year Sunset Clause for Policy Regulations

FinanceIRDAI Chairman Proposes Three-Year Sunset Clause for Policy Regulations

## IRDAI Chairman Proposes Three-Year Sunset Clause for Policy Regulations

As the chairman of the Insurance Regulatory and Development Authority of India (IRDAI), Debasish Panda recently made an intriguing proposal at Mint’s 16th Annual Banking, Financial Services and Insurance (BFSI) Summit and Awards 2024. He talked about a potentially game-changing concept that could revolutionize the insurance industry.

Panda discussed the idea of implementing a sunset clause of three years on regulations for policy dynamism. This means that every insurance law would be re-evaluated every three years to ensure it remains relevant and effective in the rapidly changing insurance landscape. As a result, they aim to streamline the industry’s growth by reducing the number of policy regulations from 100 to about 15, making it more adaptable and efficient for industry players and consumers alike.

### Simplifying Language for the Citizens

In addition to the sunset clause proposal, Panda emphasized the need to simplify the language used in insurance policies. He acknowledged that the industry often uses confusing jargon, making it challenging for consumers to fully understand the policies they purchase. Panda and his team have appointed an expert committee to address this issue and make policy documentation more comprehensible for the average citizen. This initiative aims to improve transparency and empower consumers to make well-informed decisions when purchasing insurance.

### Embracing Innovation and Engagement

Panda’s proactive approach to industry improvement extends to embracing innovation and fostering engagement within the insurance sector. He emphasized the importance of staying in touch with insure-tech companies to encourage innovative initiatives that drive insurance penetration. Moreover, he highlighted the establishment of the Bima Manthan, a platform for direct dialogue with insurance industry CEOs to set expectations and facilitate proactive engagement.

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### Facilitating Access to Insurance Products

An impactful development mentioned by Panda is the launch of the Bima Suga platform, which aims to provide greater access to a wide range of insurance products for the masses. This regulatory electronic marketplace is designed to remove information asymmetry and democratize insurance, ultimately making insurance products more accessible and inclusive.

### The Future of Insurance

Looking ahead, Panda emphasized the need to build an ecosystem that offers personalized premiums based on individuals’ risk profiling. He stressed the importance of regulatory overhaul to meet the evolving needs of the industry. With this in mind, the IRDAI has been conducting a thorough evaluation, with plans to notify 10 to 11 unified regulations encompassing various aspects of the insurance industry before the end of the financial year.

### Driving Financial Inclusion

Drawing parallels with the transformative impact of the JAM trinity in the BFSI industry, Panda highlighted the pivotal role of the Pradhan Mantri Jeevan Jyoti Beema Yojana and Pradhan Mantri Suraksha Yojana in driving financial inclusion through insurance.

### Conclusion

As I was reading about Panda’s proposals and initiatives, it’s clear that his vision for the insurance industry goes beyond regulatory changes. He’s focusing on empowering consumers, driving innovation, and ensuring inclusivity across all segments of society. With these bold steps, the insurance industry in India is poised for a transformative decade ahead.

Published: 11 Jan 2024, 09:39 PM IST

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