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The stage is all set for the next wave of growth in the insurance industry. The Insurance Regulatory and Development Authority of India (IRDAI) has created a Regulatory Sandbox with the objective to use innovative ideas to foster growth in the insurance sectors by the involvement of Fintech, Insure-Tech and Insurance Companies, in a way that provides flexibility in dealing with regulatory requirements and at the same time focusing on policyholder protection.
To promote innovation in the field of insurance, the Authority has notified the IRDAI (Regulatory Sandbox) Regulations, 2029 and also issued guidelines on the operation of Regulatory Sandbox, outlining the procedure to be followed in implementing the “Innovation in Insurance”.
According to Randip Singh Jagpal, Chief General Manager, Intermediaries – IRDAI, “The primary purpose of the guidelines is to understand and try out new ideas in the insurance field and across the entire value chain starting from solicitation to distribution to designing and underwriting of products. The participation of new players is also expected to help understand any modifications in the procedures and processes that can help expedite the growth and also locate any regulatory hurdles in the system.”
“The interested firms may submit an application to the authority requesting that for a specific period of experiment, certain regulatory guidelines be waived off. Then, the authority at the end of the evaluation process will consider if any change in the regulation is required in the interest of policyholders and in the growth of the insurance sector or not. Active participation by the different players will also provide an idea as to where the pain points are and where regulatory architecture can be modified to facilitate growth and innovation in the sector,” adds Jagpal.
This opportunity is open to all Fin-tech companies, subject to only two conditions. “One, they have to be in business for at least 1 year, and secondly, they need to have a paid-up capital of at least Rs 1 lakh. In the area of distribution and servicing, they can come on their own but when it comes to product design and underwriting, they need to partner with an insurance company. This is because the insurers will be taking on the liability on the protection side,” says Jagpal.
In order to create awareness and harness the benefits of the Regulatory Sandbox by the Insure-tech firms, FinTech Firms and other registered insurance entities, a webinar is proposed to be organized by the IRDAI. The webinar will cover the salient features of the Regulations and the Operational Guidelines with a panel discussion on the Regulatory Sandbox. The panelist will include Insure-tech firms, Indian Insurance Companies and Indian Insurance Intermediaries.
The webinar will provide an opportunity for the participants to interact with a wide spectrum of people in the field of insurance along with familiarization on the Regulations and Guidelines on the Regulatory Sandbox
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