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Exposure Draft
Ref. No:-- Date:18-05-2019
Exposure draft on IRDAI (Regulatory Sandbox) Regulations, 2019

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 be contained. 

 

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 policyholder protection.

 

The objectives of these Regulations are:

(i)            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 innovation.

(ii)          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 randip@irda.gov.in.

 

 

Randip Singh Jagpal

CGM (Int)

 

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