The Insurance Regulatory and Development Authority (IRDAI) recently issued the IRDAI (Regulatory Sandbox) Regulations 2019, which aim to facilitate the creation of a regulatory sandbox in which to test new business models, processes, proposals and applications in order to strike a balance between the orderly development of the insurance sector and the protection of policyholders' interests. Although insurance players are calling the sandbox a game changer, it remains to be seen how much it will be used.
The Insurance Regulatory and Development Authority recently issued the Report of the Committee on the Regulatory Sandbox in the Insurance Sector in India, which proposes to establish a sandbox environment in the insurance sector. According to the report, the sandbox will facilitate innovation in the Indian insurance sector and provide an ecosystem to foster the experimentation required to increase insurance penetration in the market and benefit policyholders. However, reservations remain.
The Insurance Regulatory and Development Authority of India (Re-insurance) Regulations 2018 were notified on 12 December 2018 and came into force on 1 January 2019. As well as streamlining filing requirements and processes, the regulations consolidate the existing regulations for life and general reinsurance business into a uniform set of provisions for reinsurance business in India.
The Insurance Regulatory and Development Authority of India recently introduced changes to the regulations governing motor insurance in India. Under the Motor Vehicles Act 1988, insurance cover for third-party liability is mandatory for all motor vehicles at the time of purchase. However, until recently, this third-party liability insurance had a mandatory one-year cover term and had to be renewed by the policyholder each year.
Although blockchain is relatively new, India has seen a few segmental adoptions of the technology, with some public authorities – including the Insurance Regulatory and Development Authority of India – acknowledging its potential benefits. Further, recent press reports have indicated that some insurers have already started contemplating various ways in which to implement the technology.
The Insurance Regulatory and Development Authority of India (IRDAI) recently released the IRDAI (Insurance Brokers) Regulations 2018 to revise the norms governing the establishment and operation of insurance brokers in India. The regulations have introduced a myriad of changes which largely appear to bring parity between the norms applicable to insurance brokers and web aggregators, particularly with respect to solicitation through online, telemarketing and distance marketing modes.
The Insurance Regulatory and Development Authority of India (IRDAI) has released an exposure draft for revising the IRDAI (Insurance Brokers) Regulations 2013 for comments from stakeholders. Following various representations made by insurance brokers and other stakeholders, the IRDAI issued the IRDAI (Insurance Brokers) Regulations 2018 to repeal the erstwhile 2013 regulations, bringing changes to the earlier provisions and adding to the existing compliance requirements for insurance brokers.
There were a number of interesting developments in the Indian insurance industry in 2017, including a rapid increase in the number of insurers, new forms of online commerce and evolving business processes. From a regulatory perspective, 2017 also saw a continued overhaul of the existing insurance regulatory framework, with a slew of new regulations being introduced and existing guidance being amended and updated.
By way of a May 2017 order, the Insurance Regulatory and Development Authority of India set up the Reinsurance Expert Committee to make recommendations for, among other things, the efficient implementation and operation of the order of preference for cessions specified under the Branch Office Regulations. The committee recently released its report, providing its analysis and recommendations on the terms of reference prescribed under the order.
As the Indian insurance market develops and matures further, Indian insurers and insurance intermediaries will aim to introduce public issues and list on recognised stock exchanges in order to raise more funds from the public and provide liquidity to their existing shareholders. Companies looking to be initial public offering ready should focus on ensuring optimum regulatory compliance and rectifying any identified compliance issues, which will go a long way in simplifying the process of listing.
The Insurance Regulatory and Development Authority of India recently notified the Motor Insurance Service Providers Guidelines to identify and regulate the role of automobile dealers in distributing and servicing motor insurance products. This move to recognise the role of automobile dealers gives legitimacy to existing practices of solicitation and servicing of motor insurance.
The Insurance Regulatory and Development Authority of India recently set up a committee to make recommendations for the efficient implementation and operation of the order of preference for cessions specified in Regulation 28(9) of the Branch Office Regulations. The committee report is eagerly awaited by the insurance industry, as it is expected to clarify the implementation of Regulation 28(9) and is likely to affect Indian insurers' reinsurance programmes in future.
Following a number of representations made by various stakeholders, and due to the need to update the existing health insurance framework, the Insurance Regulatory and Development Authority of India recently released new regulations and guidelines. The revised regulatory framework seeks to encourage greater internal accountability on the part of insurers, strengthen innovation in product design and promote wellness.
The Insurance Regulatory and Development Authority of India recently replaced the 2009 corporate governance guidelines with the Guidelines for Corporate Governance for Insurers in India. The 2016 guidelines seek to incorporate relevant changes introduced by the Companies Act and consider other relevant changes in the insurance sector in order to provide an appropriate corporate governance regime for Indian insurers.
The Insurance Regulatory and Development Authority of India (Registration of Indian Insurance Companies) (Seventh Amendment) Regulations 2016 have introduced a number of key changes to the existing regulations. These key amendments have provided welcome clarifications and will help to encourage investment in the insurance sector and promote growth and expansion therein.
Until recently, the 2006 Insurance Regulatory and Development Authority of India (IRDAI) Guidelines on File and Use Requirements for General Insurance Products governed the procedures and processes for introducing, modifying and withdrawing general insurance products. The procedures and processes have now significantly changed with the introduction of the IRDAI's revised guidelines, which will come into force on April 1 2016.
The Insurance Regulatory and Development Authority (IRDAI) recently released new draft regulations clarifying that commission and remuneration paid to insurance agents and insurance intermediaries will continue to be regulated and subject to the limits specified by the IRDAI. While some stakeholders view the proposed payment structure as more liberal, others believe that there is scope for further liberalisation.
The insurance sector has witnessed sweeping changes to its regulatory regime since the beginning of 2015. The most recent additions are the guidelines on the term 'Indian owned and controlled' issued by the Insurance Regulatory and Development Authority. While the guidelines shed some light on certain grey areas surrounding the recent regulatory changes in the insurance sector, further regulatory clarity is needed.
The Insurance Regulatory and Development Authority recently released draft regulations on the issuance of other forms of capital by insurers. While these draft regulations are seen as progressive, they contain certain inherent restrictions and limitations. As such, if implemented in their present form, they may run contrary to the recent amendments to the Insurance Act, which aim to encourage and facilitate increased investment in the insurance sector.