IRDAI notifies Regulatory Sandbox Regulations, 2025 repealing the 2019 regulations

On 1-1-2025, the Insurance Regulatory and Development Authority of India notified the Insurance Regulatory and Development Authority of India (Regulatory Sandbox) Regulations, 2025 to increase efficiency and ease of doing business in the insurance sector. The provisions came into force on 3-1-2025.

The regulations repeal Insurance Regulatory and Development Authority of India (‘IRDAI’) (Regulatory Sandbox) Regulations, 2019.

Key Points:

1. Objectives:

   • Facilitate innovation in the insurance sector;

   • Ensure orderly development of insurance sector;

   • Protect interest of policyholders;

   • Facilitate creation of regulatory sandbox environment;

2. Application for grant of permission for promoting innovation in insurance in India:

   • Anyone who desires to promote/ implement innovation in insurance will have to make an application to the Competent Authority electronically.

   • A non- refundable fee has to be paid along with the application.

   • Eligible criteria will be laid down by the Competent Authority.

   • Competent Authority will also lay down the parameter for the experimentation stage of regulatory sandbox, liabilities and responsibilities of the applicant who is granted permission.

3. The permission granted by the Competent Authority will be valid for an experiment period if the following eligibility criteria is met by the applicant and the application:

   • promotes innovation beneficial to insurance sector in India;

   • is in the interest of the policyholders;

   • is conducive for the orderly growth of the industry;

   • will promote increase in insurance penetration in the country;

   • bring in efficiency in insurance business;

   • promotes ease of doing insurance business.

4. Revocation of permission:

   • If the activities carried out does not fulfill the eligibility criteria;

   • If the activities are in violation of:

     • Insurance Act, 1938

     • IRDAI Act, 1999