IRDAI opens application window for regulatory sandbox participation

Mumbai: India’s insurance regulator will soon open a one-month window to accept applications from companies wanting to participate in the regulatory sandbox initiative. Through the programme, the regulator would allow insurance firms looking to dabble with new ideas and technologies some leeway in a controlled environment to make the existing regime more startup-friendly.

The Insurance Regulatory and Development Authority of India (IRDAI) said at the curtain raiser here on Friday that the first window for applications will open from September 15 to October 13. The regulator has set a cap of 10,000 policies and Rs 50 lakh premium for experiments in the sandbox environment.

“The working group for setting the framework of the sandbox arrived at this number after careful deliberation. We didn’t want to keep the cap too low or too high,” said Randip Singh Jagpal, chief general manager, IRDAI, at the joint CII and IRDAI event. “If in the future we feel that there is a need to increase the cap, we may consider doing so.”

The Reserve Bank of India and the Securities and Exchange Board of India have also announced working guidelines for their respective sandbox programmes. The three sandboxes are aimed at creating an environment of eased regulations for testing new product-based and technology-based innovations.

However, unlike the RBI sandbox, which won’t accept applications from participants with solutions based on cryptocurrency, credit rating, credit registry and chain marketing services, IRDAI has set no such restrictions. The participants of the insurance sandbox programme also won’t have to take mandatory insurance policy as prescribed by the Reserve Bank to its applicants.

“We are open to all kinds of innovations in the insurance space and want to reduce the entry hurdle as much as possible,” said Jagpal.

The regulators said that they were keen to test out ideas based on both product and technology such as mobile application services, data analytics, blockchain, API integrations, artificial intelligence, digital KYC, smart contracts, cybersecurity products and online market places.