Draft IRDAI (Regulatory Sandbox) Regulations, 2019

May 21, 2019 | by Avantis RegTech Legal Research Team

The Insurance Regulatory and Development Authority (IRDAI) on May 18, 2019, in consultation with the Insurance Advisory Committee, has published draft IRDAI (Regulatory Sandbox) Regulations, 2019. These Regulations shall come into force on the date of their publication in the Official Gazette and will remain in force for a period of two years from the date these come into force.

The main objectives of these Regulations are:

1. 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 technological innovation.

2. To facilitate creation of regulatory sandbox environment and to relax such provisions of any Regulations framed by the Authority in this regard for a limited scope and limited duration if such a relaxation is needed.

The Regulations defines the meaning of an applicant, regulatory sandbox as well as the sandbox environment. It also lays down the procedure for seeking permission for promoting innovation in insurance in India which includes:

(a) the categories of application (insurance solicitation & distribution, insurance products, underwriting, policy and claims servicing); 

(b) the details of filing of application (cohort approach); 

(c) the conditions for grant of permission; 

(d) the period of permission 6 months); 

(e) the conditions for revocation of permission; 

(f) the extension of period of permission (6 months); 

(g) internal monitoring, review and evaluation of systems and controls; 

(h) review of proposal approved by the Authority; and 

(i) conclusion of proposal

The Regulations also provide for relaxation of one or more provisions of any Regulations to the applicant subject to the conditions given above. The maximum period for which the relaxation can be granted is one year. It also allows issuance of necessary guidelines relating to operational issues pertaining to Regulatory Sandbox.

All the interested stakeholders are requested to submit their comments or suggestions on the draft Regulation by May 31, 2019. The comments or suggestions may be e-mailed to [email protected].

Click here to download the Draft.


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