The Insurance Regulatory And Development Authority of India (IRDAI) has notified the one-time Mandate for blocking the amount towards premium through Unified Payments Interface (UPI mandate) for issuance of life and health insurance policies- Bima-ASBA.
Based on the requests/ representations received by IRDAI from the insurers towards bringing about operational ease in meeting this requirement, to facilitate smooth transactions of payment of premium, a facility of the Unified Payments Interface (UPI) One Time Mandate (OTM) is enabled to be used by insurers.
This feature allows users to block funds in their bank accounts for specific transactions, ensuring availability of funds while deferring actual payments. This service is useful in multiple scenarios where the customer prefers to authorize a block on funds without immediate debits, facilitating smoother transaction processing.
Under’Bima Applications Supported by Blocked Amount (Bima ASBA) transfer of money from the prospect to the insurer happens only when an insurance policy is issued. In this facility, insurers can offer a one-time mandate for blocking a certain amount through Unified Payment Interface (UPI) in the bank account of the concerned prospect.
Amount towards insurance premium will be debited only after the insurer decides to accept the proposal. In case the insurer does not accept the proposal, the amount shall be unblocked and shall be released and shall be available at the disposal of the prospect.
Insurers are mandated to offer Bima ASBA facility to its prospects for life and health insurance policies.
Insurers shall provide an option in the proposal form, through a standard declaration, whereby the prospect may authorize the insurer to block the amount in their bank account through UPI. Both Life insurance and General Insurance Councils, within one week from the date of issuance of this circular, shall issue standard declaration to be included in the proposal for taking the authorization.
Bima-ASBA shall be at the option of the prospect. No proposal shall be rejected for the reason that the prospect has not opted for Bima-ASBA
This premium payment facility, Bima-ASBA, shall be offered to the prospects in addition to the existing options available for making payment of premium as specified in Regulation 16 (2) of IRDAI (Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers) Regulations, 2024.
The insurer shall partner with multiple banks and shall have appropriate systems and processes in place and necessary contractual agreements with the partner banks so that:
One-time mandate through UPI shall be created:
a) only in favour of the insurer.
b) prospect authenticates through one-time mandate, as per the applicable provisions and laws.
c) with a valid period of maximum 14 days or till the date of the underwriting decision, whichever is earlier.
The amount so blocked under Bima-ASBA shall be unblocked:
a) automatically after expiry of 14 days from the date of initial blocking of funds.
b) within one working day from the date of non-acceptance of the proposal form:
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