The insurance regulator on Tuesday granted permission to insurance companies and intermediaries to test their products under the regulatory sandbox approach for a period of six months (which can be extended upto 12 months) before launching it in the market.
"However, if the proposal covers 5,000 persons or completes Rs 50 lakhs of premium or any other parameter which the authority specifies, the proposal will deem to have been completed," said Irdai.
The regulator has also said that the applicants be it an insurer, insurance intermediaries or any other entity who are planning to apply for the process and test their product should have a minimum net worth of Rs 25 lakhs for last three years.
Moreover, applicants can apply individually or jointly in any of the categories but if the category involves insurance product then the applicant has to partner with an insurance company. Irdai has also said that there would be defined entry and eligibility criteria as well as exit parameters for the applicants.
The regulator through the “Regulatory Sandbox Approach” wants to provide a space to facilitate innovations in the insurance sector, make the insurance products more affordable and relevant for the insured and give a boost to insurance penetration.
Irdai had constituted a committee under the Chairmanship of Randip Singh Jagpal to look into regulatory sandbox approach aspect last year. It has, now, invited suggestions and comments from all insurance, reinsurance and foreign reinsurance companies.