Bajaj Allianz becomes first insurer offering Bima-ASBA: What is it?
What's the story
In a major leap for the insurance sector, Bajaj Allianz Life has become the first company to introduce the Bima-ASBA facility.
The innovative service is in line with the Insurance Regulatory and Development Authority of India's (IRDAI) mission to simplify premium payments and increase transparency.
Bima-ASBA's introduction heralds a new era in insurance premium payment methods, providing policyholders an efficient and secure way to manage their policies.
Facility details
A new approach to insurance premium payments
The Bima-ASBA facility enables policyholders to block a certain amount (of up to ₹2 lakh) in their bank account via UPI's One-Time Mandate (OTM).
The amount is deducted only after the insurer has underwritten and approved the policy proposal.
If the application is not processed within 14 days or the proposal is rejected, the blocked amount is automatically released back into the policyholder's account.
Financial benefits
Bima-ASBA ensures continued interest earnings for policyholders
A major benefit of the Bima-ASBA facility is that it keeps the funds in the policyholder's account and continues to earn interest until the policy is issued.
This way, the customers' money doesn't remain idle while the policy is underwritten.
Bajaj Allianz Life has partnered with payment service providers to roll out this facility, furthering its commitment to customer convenience and financial security.
Company perspective
Bajaj Allianz Life's commitment to customer security and flexibility
Serving more than 4.02 crore individual and group customers, Bajaj Allianz Life said the Bima-ASBA facility adds an extra layer of security and flexibility for its customers.
The firm manages assets worth ₹1.22 lakh crore as on December 31, 2024.
This new facility does away with the hassle of paying premiums upfront and worries about refunds, further reinforcing the insurer's commitment to customer satisfaction and trust.
Regulatory directive
IRDAI mandates Bima-ASBA facility for all insurers
The IRDAI has mandated all insurers to provide the Bima-ASBA feature by March 1, 2025, in a circular issued on February 18, 2025.
The directive is part of the Master Circular on 'Protection of Policyholders' Interests' issued on September 5, 2024.
The move by the regulatory body underscores its commitment to protecting policyholders' interests and promoting transparency in the insurance sector.