Insurance Regulatory and Development Authority of India (Irdai) will soon approve products of life insurance industry under the sandbox technology. Recently, the insurance regulator had approved 33 products under the regulatory sandbox in the non-life and distribution category.
Irdai chairman Subhash Khuntia speaking at an “Digital Disruption: Embracing digital innovation in (Re) Insurance Business in Mumbai said, “Fintech solutions are also going to transform financial services in a big way. We in Irdai have already allowed a regulatory sandbox because we do not know whether the (existing) regulations will be adequate for the new processes that the technologies will ascertain. This is an experiment we we’ll allow for six months and up to one year. If we find that these are old processes which will help transactions and make life easier for the insurer as well as the insured without compromising on the policy holders protection, we will think of tweaking the regulations to make it happen.”
Regulatory sandbox will allow insurance companies to test products in particular geography or among a set of few policyholders before they are available in the market. Regulator also said that in the months to come they would again open the application under sandbox technology.
Speaking on the lines of the new tax regime which allows investors to forgo certain deduction and exemptions, Khuntia said, “Section 80C of the I-T (Income Come) Act remains as of now, it has not been removed. Different option has been given but I am sure people would understand the need for protection. So, those who need protection will go for it. I do not think so that it will impact collections. It is not only for tax exemption that people are going for insurance.”
He also added the government itself has said they will remove exemptions gradually, it will not be abruptly removed. “By that time I would like the insurance industry to create such awareness that people understand the need for protection.”
Irdai chief also added a total of about Rs 9,500 crore has been provided for three non-life insurance companies such as Oriental Insurance, United India Insurance and National Insurance. For the next fiscal it is Rs 6,950 crore, while it is Rs 2,500 crore for this financial year. This move could improve the solvency margins of the insurers.