INSURANCE
IRDAI to allow testing of insurance products, services for six months
Mar-06-2019

The Insurance Regulatory and Development Authority of India (IRDAI) will allow testing of relevant products and services under the regulatory sandbox approach for six months before they are commercially launched in the market. The regulator had set up a committee in September 2018, to look into the concept of a regulatory sandbox in the country. A sandbox approach means experimenting and learning before finally adopting a technology or system. This approach helps in containing the impact of failures.

As part of the regulatory sandbox initiative, IRDAI has said that there would be defined entry and eligibility criteria. IRDAI said that companies planning to test products will have to form a consortium and apply. The applicants would include insurers or insurance intermediaries or any other entity other than an individual having a minimum net-worth of Rs 25 lakh for the last three years. This will encourage insurance-technology innovations that help increase insurance penetration as well as seek to benefit policyholders at large.

The applicant can apply in any one of more of the five categories namely insurance solicitation or distribution, insurance products, underwriting, policy & claims servicing and any other. The applicant could apply singly or jointly in one or more than one category, provided that if the category involves insurance product or underwriting, then the applicant necessarily has to partner with an insurer.

It said that while the initial permission will be granted for six months, this can be extended by another six months. After this, the regulator will look into this proposal and decide whether this can be continued in the market or discontinued. All the participants will have to delete the customer data that they had collected for the testing purposes.

 

 

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