Irdai Revamps Sandbox Framework to Propel Insurance Innovation

The Insurance Regulatory and Development Authority of India (Irdai) has expanded its regulatory sandbox framework to bolster innovation and operational efficiency in the insurance sector. The 2025 regulations now place emphasis on principles, introducing measures for enhanced data governance and security, and promoting cross-sector proposals to encourage growth.

The Insurance Regulatory and Development Authority of India (Irdai) has announced significant changes to its regulatory sandbox framework in an effort to encourage innovation and improve operational efficiency within the insurance sector.

The newly revised IRDAI (Regulatory Sandbox) Regulations, 2025, adopt a principle-based approach, with detailed operational guidelines to be issued via a master circular. A notable feature is the provision for Inter-Regulatory Sandbox proposals, which allows for collaboration across multiple financial sectors.

Further enhancements include consolidated regulations on the maintenance and sharing of information, mandatory electronic record-keeping embedded with robust security and privacy measures, and stringent requirements that data be stored in India-based data centers. These reforms are part of Irdai's strategy to create a dynamic regulatory framework that promotes innovation, strengthens governance, and ensures policyholder protection.

(With inputs from agencies.)