IRDAI forms committee on insurance regulatory sandbox

The insurance regulator has set up a committee to look into the concept of a regulatory sandbox in the country. Under this, the committee will look into the possibility of having an environment where fintech solutions can be experimented on and the consequences of failure can be contained.

Moneycontrol had earlier reported the Insurance Regulatory and Development Authority of India (IRDAI) will allow companies to test products in a particular geography, or among a set of policyholders before they are made available in the market.

IRDAI Chairman Subhash C Khuntia had said a few days earlier that there will be a concept called sandbox method where products can be tested. Khuntia added if they are successful, such products can be filed for approval.

The 10-member committee with representatives from both the regulatory body and the industry will have IRDAI general manager RK Sharma will be the convener. It will have to submit the report within two months.

The committee will look into the key issues that fintech poses across the insurance value chain. Further, the practices prevalent in other industries will also be looked at. Also, a draft consultation paper on regulatory sandbox in insurance space will also be released by the committee.

Currently, about 780 life insurance and over 1,000 general insurance products are being sold in the market for individuals and groups.

This will help companies have a better success rate with their products. According to industry estimates, for every 10 new products that are filed, two fail to make the mark at present.