Rejections await many of the 150-odd insurance and fintech applicants that are keen to participate in the sandbox project of India’s insurance regulator, regional precedents show.
In Singapore, the rejection rate for the regulatory sandbox project was as high as 90%, and the Insurance Regulatory and Development Authority of India (Irdai) may have a similar rejection rate for these applications, sources aware of the scrutiny standards told ET.
“More than 150 applications have been submitted to IRDAI, with solutions ranging from distribution-side innovation to marketplace models,” said a person with knowledge of the matter.
“However, given the high-risk factor of testing these products on a live audience, the acceptance rates could be on the lower side.”
The insurance sandbox project will allow insurers and technology companies to collaboratively experiment with new products and technology on a live audience under supervision of the regulators. The exercise has been designed primarily to help the regulator gauge real-life implications of the commercial use of new technologies before giving them the regulatory nod for commercial launch.
“If you look at the Monetary Authority of Singapore’s sandbox, the rejection rates were almost 90%; just 7 of the 67 applications that were submitted to them made the cut,” said the source cited above. “There are several matters to consider before applications are accepted.”
These applications are currently being reviewed by an eight member panel headed by IIIT Bangalore director S Sadagopan, the insurance regulator had said in a statement in October. Irdai didn’t respond to ET’s mailed queries. The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) also announced working guidelines for their respective sandbox programmes.
The three sandboxes are aimed at creating an environment of easier regulations for testing new product-based and technology-based innovations.
IRDAI had said earlier that it was keen to test out ideas based on both product and technology, such as mobile application services, data analytics, blockchain, API integrations, artificial intelligence, digital KYC, smart contracts, cybersecurity products and online market places.
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