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Exercise regularly? Pay lower premiums: How IRDAI's 'sandbox' is driving innovation in insurance

General insurers are set to launch several limited-period products. Read on to find out if you should buy these products

February 12, 2020 / 05:41 PM IST

Consider this: You are part of a group of fitness freaks, all in their mid-forties. Despite perfect health parameters, your premiums are higher than those for a 35-year-old with no fitness regimes and facing the risk of obesity-related ailments in the future. Think it’s unfair? A solution could be on its way, as early as next month. Such policyholders might be able to collectively buy a cost-effective group cover, provided they demonstrate the desired fitness levels.

The Insurance Regulatory and Development Authority of India (IRDAI) has approved 30 non-life products under the Regulatory Sandbox framework. Prospective policyholders will be able to buy products with features that regular policies don’t offer during a six-month testing period.

The proposition

In August last year, the IRDAI had issued regulatory sandbox guidelines, inviting insurers to send in proposals with features not permitted under the existing regulatory framework. It defines regulatory sandbox as the environment that provides a testing ground for new business models, processes and applications that “may not necessarily be covered fully by or are not fully compliant with existing regulations.” Put simply, the purpose is to allow experiments to test viability and acceptability of novel products.