IRDAI is working on the guidelines for ‘Sandbox’ method to allow insurers to test products in a particular geography or among a set of few policyholders before they are available in the market.
About:
The term ‘Sandbox’ In the financial industry, refers to a mechanism for developing regulation that keeps up with the fast pace of innovation.
The term originally referred to the small box filled with sand where children play and experiment in a controlled environment. In the computer science world, a sandbox is a closed testing environment designed for experimenting safely with web or software projects.
Now, in the digital economy arena, it means a regulatory sandbox i.e. testing grounds for new business models that are not protected by current regulation, or supervised by regulatory institutions.
These testing grounds are especially relevant in the fintech world, where there is a growing need to develop regulatory frameworks for emerging business models.
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