INSURANCE
Insurance Regulator sets up single point of contact for regulatory sandbox
Aug-28-2019

The Insurance Regulatory and Development Authority of India (IRDAI) has set up a single point contact for its Regulatory sandbox (RS) initiative, wherein financial technology firms can seek permission to experiment with innovative approaches for the growth of the sector. The RS approach can be used to carve out a safe and conducive environment to experiment with innovative approaches (including Fin-Tech solutions), and where the consequences of failure, if any, can be contained. Insurance Regulator has already invited applications for the RS from September 15 to October 14, 2019. RS was created with an objective to use innovative ideas to foster growth and increase the pace of most innovative companies, in a way that provides flexibility in dealing with regulatory requirements and at the same time focusing on policyholder protection.

IRDAI has nominated Sanjay Verma, DGM (Distn Dev) as the Single Point of Contact on regulatory sandbox matters. The nominated contact will interact and guide the applicants. On regulatory relaxation, the IRDAI said it may consider granting limited regulatory relaxation to the proposal that promotes innovation in insurance in India. However, no relaxation would be offered in respect of compliance with the Insurance Act, 1938, the IRDA Act, 1999 or any other applicable statutory provisions. The IRDAI (Regulatory Sandbox) Regulations, 2019 was notified last month. The regulations are aimed 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 innovation.

The IRDAI said another objective is to facilitate creation of regulatory sandbox environment and, if deemed fit, to relax such provisions of any existing regulations as needed. The RS allows the regulator, innovators, financial service providers and customers to conduct field tests to collect evidence on the benefits and risks of new financial innovations, while carefully monitoring and containing their risks.

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