Exposure draft onIRDAI (Regulatory Sandbox) Regulations, 2019
Reference is drawn to the report of the Committee onRegulatory Sandbox in insurance sector in India that has recommended creationof a Regulatory Sandbox by the Authority. As is well known the “RegulatorySandbox Approach” can be used to carve out a safe and conducive space toexperiment with Fin-Tech solutions, and where the consequences of failure canbe contained.
In light of the same, the Authority proposes to create aRegulatory Sandbox whose objective is to foster growth andincrease the pace of the most innovative companies, in a way that providesInsurtech in particular and the Fintech sector as a whole with flexibility indealing with regulatory requirements and at the same time focussing onpolicyholder protection.
The objectives of these Regulations are:
The Regulatory sandbox regulations defines a) anapplicant (insurer or insurance intermediary or a person other than individualhaving a networth of Rs 10 lakhs and a standing of one financial year), b) regulatorysandbox and c) the sandbox environment.
The Regulations also lays down the procedure for seekingpermission for promoting innovation in insurance in India which includes i) thecategories of application (insurance solicitation & distribution, insuranceproducts, underwriting, policy and claims servicing); ii) the details of filingof application (cohort approach); iii) the conditions for grant of permission;iv) the period of permission 6 months); v) the conditions for revocation ofpermission; vi) the extension of period of permission (6 months); vii) internalmonitoring, review and evaluation of systems and controls; viii) review ofproposal approved by the Authority; and ix) conclusion of proposal.
The Regulations also provide for relaxation of one ormore provisions of any Regulations to the applicant subject to the conditionsgiven above. The maximum period for which the relaxation can be granted is oneyear. It also allows issuanceof necessary guidelines relating to operationalissues pertaining to Regulatory Sandbox.
The draft regulations are placed for comments, which maybe sent on or before 31stMay, 2019 to the undersigned at
Randip Singh Jagpal