Irdai notifies extending validity of sandbox regulations by another 2 years
Premium- The move aims to enable the completion of the experiment of the existing sandbox proposals and also to allow new sandbox proposals for the experiment
PremiumNEW DELHI : The Insurance Regulatory and Development Authority of India (Irdai) on 12 April notified the extension of its sandbox regulations by another two years to enable the completion of the experiment of the existing sandbox proposals and also to allow new sandbox proposals for the experiment.
Naval Goel, founder and chief executive officer, PolicyX.com said, "There is merit in this extension of regulatory sandbox, which is established for live testing of new products or services. This amendment will help drive innovation in the insurance sector as insurance companies will now be able to experiment considerably without taking approvals to launch a new product."
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"The increase in new innovative products will further extend penetration of insurance among the masses by offering relevant and useful products required in a particular condition. Hence the adaptability of innovative products will shoot up in lesser time," Goel added.
The original sandbox regulations released in 2019 indicated that the regulator could run them for two years. The idea was to run the sandbox for two years and then take a view on how things work. However, with the delays caused by covid, among other things, the first year of applications themselves took too long to roll out and be completed. Hence, the current notification has extended the regulations by another 2 years.
Vaidyanathan Ramani, head-product and innovations, Policybazaar.com, said, “Irdai can now continue to run the experiments under the framework for another 2 years. This is a welcome and much-appreciated thing as sandbox has been very helpful to bring new ideas to the table."
Some notable product launches through the Sandbox include comprehensive app-monitored wellness programmes with wearable devices, especially for lifetime health conditions such as diabetes mellitus; short-term and need-based insurances; pay-as-you-drive insurance in the private car policy, own damage segment, where cars with limited usage are charged lower premiums than ones with regular/extensive usage, etc.
Aatur Thakkar, co-founder and director at Alliance Insurance Brokers said, “The first set of approvals involved evaluating as high as 173 proposals received in 3 months. The high-powered committee appointed for this purpose evaluated these proposals and gave the nod for 33 of them. The approvals were time-bound for 6 months from 1 February 2020. The second and third tranches contained 16 and 18 approvals, for similar 6 months periods from 1 May 2020 and 1 July 2020, respectively." Thakkar further said, “This was followed with a second cohort of filings for which Irdai had provided a window between 15 September 2020 and 14 October 2020. The filings were larger in number than the first cohort, totaling 185."
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