Page 8 - Insurance Times June 2019

SEBI, IRDAI launch regula- Non-exclusion of critical illnesses in health policies, pro-
tory sandbox for fintech poses IRDAI
IRDAI has put forwarded proposal for excluding several critical illnesses such
innovations
as mental problems, genetic diseases,
After the Reserve Bank of India re-
neurodevelopment disorders and psychologi-
leased a draft
cal disorders from health insurance policies.
framework for
With the increase in the number of health in-
setting up a
surance companies as well as health insurance
r e g u l a t o r y
products in the market, IRDAI in draft guide-
sandbox (RS)
lines has proposed that the health insurance
for fintech players in the counter, the
industry should adopt a uniform approach while incorporating exclusions in the
market and insurance regulators
health insurance products.
have also launched similar initia-
IRDAI had constituted a working group on the standardization of exclusions in
tives. RS is an infrastructure that
health insurance contracts. After examining the recommendations of the work-
helps fintech players live test their
ing group, the regulator has proposed to issue guidelines on exclusions in the
products or solutions, before getting
health insurance products. No health insurance policy shall incorporate exclusions
the necessary regulatory approvals
in the terms and conditions of the policy contract on diseases contracted after
for a mass launch. It saves start-ups
taking the policy.
time and cost.
Also, impairment of persons' intellectual faculties by the usage of drugs, stimu-
Fintech in India is at the cusp of a
lants or depressants as prescribed by a medical practitioner cannot be excluded.
revolution and regulators are aware
"Treatment of mental illness, stress or psychological disorders and
of the fact. The market regulator
neurodegenerative disorders," should not be included in exclusions listed in the
SEBI and insurance regulator IRDAI
policy. Puberty and menopause-related disorders, age-related macular degen-
have announced initiatives to en-
eration and behavioural and neurodevelopmental disorders too cannot be ex-
courage tech start-ups, especially
cluded, said the draft.
fintech, by making data and systems
available to them through the RS. In
Homeowners, small businesses can look forward to af-
a circular on May 20, SEBI released
its RS framework, to create an eco- fordable insurance soon
system that promotes innovation in
Individual homeowners and small businessmen living in regions prone to natu-
the securities market.
ral calamities can look for better cover soon. In
“SEBI is proposing an ‘Innovation the wake of recent natural calamities resulting
Sandbox’, which would be a testing in huge loss of dwellings and commercial estab-
environment, where fintech firms lishments, a working group of IRDAI has sug-
and entities not regulated by SEBI, gested a simple, affordable insurance cover for
including individuals, could test their homeowners.
proposed solutions offline, isolated
Similarly, different products for micro commer-
from the live market, subject to
cial establishments having a risk value of Rs. 5 crore and above Rs. 50 crore
fulfilment of the eligibility criteria,
have been proposed. The inadequate sum insured for dwellings can be attrib-
based on market-related data made
uted to the fact that it is the customers who decide on it, with insurers having
available by stock exchanges, de-
no say over the matter.
positories and qualified registrar and
Many a time, the customers insure homes for their purchase price. However,
share transfer agents (QRTAs),” the
“there has to be a system of default sum insured for all the dwellings such that
circular noted.
the default sum insured is a reasonable approximation of the correct value of
IRDAI in February this year recom-
construction of the building,” the working group said. It also recommended
mended setting up a regulatory
insurance of home in multi-storied apartments for total saleable price of the
sandbox to test new digital and tech-
apartment based on ready-reckoner rates published by each State government.
based innovations, before launching
On the tenure, it has been suggested that there should be a five-year period of
them in the market.
validity for dwelling structure policies.
8 The Insurance Times, June 2019