IRDAI broadens the scope of its regulatory sandbox framework to encourage innovation.

Innovations and Initiatives Innovations and Initiatives

Posted by NewAdmin on 2025-01-17 12:56:01 |

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IRDAI has expanded the scope of its regulatory sandbox framework to promote innovation, enhance efficiency, and simplify business processes. The newly introduced IRDAI (Regulatory Sandbox) Regulations, 2025 are now more principle-based, with operational details to be issued through a master circular, according to the Insurance Regulatory and Development Authority of India (IRDAI).

A key addition to the framework is a provision enabling the submission of Inter-Regulatory Sandbox proposals that span multiple financial sectors.

A regulatory sandbox typically involves live testing of new products or services within a controlled regulatory environment, where regulators may offer certain relaxations solely for testing purposes.

Additionally, the regulator has consolidated regulations regarding the maintenance and sharing of information by regulated entities. The new regulations require electronic record-keeping with stringent security and privacy measures. Entities must also adopt a data governance framework and implement board-approved policies for record maintenance.

The rules further stipulate that confidential information must be shared in compliance with data security guidelines, and all data must be stored in data centres located and maintained within India.

IRDAI has also amended the IRDAI (Meetings) Regulations, 2025, IRDAI (Insurance Advisory Committee) (Amendment) Regulations, 2025, and IRDAI (Re-Insurance Advisory Committee) (Amendment) Regulations, 2025. These changes are part of IRDAI's efforts to create a modern, efficient, and principle-based regulatory framework.

By encouraging innovation, enhancing governance standards, and emphasising data security, these measures are designed to promote sustainable growth, improve operational efficiency, and ensure policyholder protection in the evolving insurance industry.

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