Exposure draft on
IRDAI (Regulatory Sandbox) Regulations, 2019
Reference is drawn to the report of the Committee on
Regulatory Sandbox in insurance sector in India that has recommended creation
of a Regulatory Sandbox by the Authority. As is well known the “Regulatory
Sandbox Approach” can be used to carve out a safe and conducive space to
experiment with Fin-Tech solutions, and where the consequences of failure can
In light of the same, the Authority proposes to create a
Regulatory Sandbox whose objective is to foster growth and
increase the pace of the most innovative companies, in a way that provides
Insurtech in particular and the Fintech sector as a whole with flexibility in
dealing with regulatory requirements and at the same time focussing on
The objectives of these Regulations are:
To strike a balance between orderly
development of Insurance sector on one hand and protection of interests of
policyholders on the other, while at the same time facilitating technological
To facilitate creation of regulatory sandbox
environment and if deemed fit to relax such provisions of any Regulations
framed by the Authority in this regard.
The Regulatory sandbox regulations defines a) an
applicant (insurer or insurance intermediary or a person other than individual
having a networth of Rs 10 lakhs and a standing of one financial year), b) regulatory
sandbox and c) the sandbox environment.
The Regulations also lays down the procedure for seeking
permission for promoting innovation in insurance in India which includes i) the
categories of application (insurance solicitation & distribution, insurance
products, underwriting, policy and claims servicing); ii) the details of filing
of application (cohort approach); iii) the conditions for grant of permission;
iv) the period of permission 6 months); v) the conditions for revocation of
permission; vi) the extension of period of permission (6 months); vii) internal
monitoring, review and evaluation of systems and controls; viii) review of
proposal approved by the Authority; and ix) conclusion of proposal.
The Regulations also provide for relaxation of one or
more provisions of any Regulations to the applicant subject to the conditions
given above. The maximum period for which the relaxation can be granted is one
year. It also allows issuanceof necessary guidelines relating to operational
issues pertaining to Regulatory Sandbox.
The draft regulations are placed for comments, which may
be sent on or before 31stMay, 2019 to the undersigned at firstname.lastname@example.org.
Randip Singh Jagpal