The insurance regulator IRDAI has mooted the idea of a regulatory sandbox for innovations in the FinTech and insurance space.
The IRDAI proposed a "regulatory sandbox approach" for a safe and conducive space to experiment with FinTech solutions where consequences can be contained, reports Times of India.
"In the recent past, new insurance companies and insurance intermediaries have carried out technological innovations in their products and services. The authority encourages companies to develop such new technologies to add value for customers, increase efficiency and better manage risks," said Mr S C Khunita, IRDAI chairman.
"Against the backdrop of a fast evolving financial technology landscape, where FinTech solutions are becoming more common and sophisticated, a responsive and forward looking regulatory approach will further enhance the ability of promising FinTech innovations to develop and flourish," he added.
In this regard, the regulator has formed a 10-member committee comprising IRDAI senior officials as well as representatives from insurance companies.
The IRDAI said that among the issues to be examined are: regulatory issues FinTech poses across the insurance value chain; developments in FinTech, practices followed in other financial sectors such as banking and capital markets, and practices followed in international jurisfictions such as Singapore, UK and Hong Kong. The committee would also seek feedback from industry participants and put a draft consultation paper in the next two months.