Irdai Rolls Out Bima-ASBA: Transforming Insurance Premium Payments

Irdai introduces Bima-ASBA, a facility eliminating unauthorised deductions and enhancing transparency in premium payments. Policyholders can now block funds in their bank accounts, which are debited only upon policy issuance. Experts highlight its benefits in ensuring security and smooth transactions, resolving disputes, and preserving interest income.

The Insurance Regulatory and Development Authority of India (Irdai) has introduced a new payment facility, Bima-ASBA, designed to streamline insurance premium transactions. Through this facility, policyholders can block the premium amount in their bank accounts, which will only be debited once the insurance policy is issued.

This approach eliminates issues like unauthorized deductions and delayed refunds, providing greater control over transactions for the customers. Jitendra Attra, SBI General Insurance's CFO, praised Bima-ASBA for enhancing transparency and security in premium payments, while also facilitating a hassle-free, automated mechanism for policyholders.

Echoing these sentiments, Sanket Gupta, CFO of IFFCO Tokio General Insurance Company, explained that similar to the ASBA mechanism in the IPO market, Bima-ASBA allows funds to remain in the customer's account until policy issuance. This will resolve many disputes related to timing and will preserve interest income during the interim period.

Furthermore, Bima-ASBA ensures greater consumer protection by blocking funds rather than immediately debiting them, preventing any potential misuse or miscommunication in premium payments.

(With inputs from agencies.)