IRDAI is making efforts to enhance insurance awareness and penetration in rural areas, and their plan is gaining momentum through the issuance of draft guidelines for Bima Vahak. Bima Vahak is a specialized distribution channel that aims to reach every Gram Panchayat, thus playing a crucial role in achieving the ‘Insurance for all by 2047’ objective.

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An overview of the news

• It seeks to establish a dedicated distribution channel at the level of Gram Panchayats.
• The guidelines propose Corporate Bima Vahaks and Individual Bima Vahaks for the distribution channel.
• Insurers would engage Corporate Bima Vahak, which are legal persons registered in accordance with the respective laws. Insurers can appoint Individual Bima Vahak, who could be any individual appointed directly by the insurer or appointed by a Corporate Bima Vahak.
• Both corporate and individual BVs would have authorization to undertake activities such as collecting proposal information and KYC documents, as well as coordinating services related to claims.
• As per the draft, every insurer will have to provide alternative mode for payment of premium by prospects or policyholders.

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Bima Vahak: Key Objectives and Importance

• The primary emphasis is on recruiting women as Bima Vahaks, as they have the ability to establish trust with local residents and enable the expansion of insurance services in different communities.
• By actively interacting with the local population, Bima Vahaks strive to improve the availability and knowledge of insurance in every part of the country.
• Anticipations suggest that the Bima Vahak initiative will have a substantial impact in promoting insurance accessibility, increasing awareness, and tailoring insurance products to meet the varied requirements and aspirations of individuals in every Gram Panchayat throughout India.

Bima Vahak: Significance and Beneficiaries

• The field force, consisting of both corporate and individual Bima Vahaks, will play a crucial role as the final link between insurers and customers.
• The focus will be on recruiting women who can establish trust within local communities and effectively distribute and service insurance products.
• The responsibilities of the Bima Vahak will encompass a wide range of activities, including collecting proposal information, handling KYC documents and submissions, as well as providing coordination and support for policy and claims-related services.
• However, the insurer will retain the responsibility of ensuring KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance for policies sourced through the Bima Vahaks.
• These guidelines, which are open for comments until June 22, specify the expectations and limitations for insurers.
• Additionally, the guidelines recommend that companies implement a Board-approved policy concerning Bima Vahaks, covering aspects such as their terms of appointment, territorial allocation, required educational qualifications, training standards, and permitted activities.

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