Insurance Commission Releases Guidelines on A Regulatory Sandbox Framework
Understanding the need to promote new products and services and the importance of innovation in the industry, the Insurance Commission (IC) released guidelines on the adoption of a regulatory sandbox framework.
The framework is applicable to insurance companies, health maintenance organizations (HMOs), pre-need companies, reinsurance brokers, adjusters, mutual benefit associations, and other entities regulated by the IC. Other interested non-regulated entities such as startups and financial service providers must first comply with existing regulations before submitting any application to participate in a regulatory sandbox.
The regulatory sandbox would allow these entities to live test innovative products, services, business models, and/or other delivery mechanisms on a small scale for not more than a year, which may be extended for at another 6 months.
Interested entities may apply with the Commission’s Regulation, Enforcement and Prosecution Division (REPD). The proposal must include the business model, definition and explanation of the proposed innovation, potential benefits, a clear methodology with proposed safeguards, and a clear exit plan, among other requirements.
The Commission shall screen applications based on the innovative ideas, financial inclusion, consumer benefit, readiness for testing, and soundness of the exit plan. If approved, applicants will then submit a monthly report to the IC. Moreover, if the experimentation is successful, the applicant shall submit a report to the REPD providing an objective assessment of the potential impact of the innovation.
The full issuance can be accessed here.