Philippines issues rules on insurtechs' adoption of regulatory sandbox

All entities must gain the approval from the regulator.

Philippines’ Insurance Commission (IC) has released guidelines for the adoption of a regulatory sandbox framework for insurance technology (insurtech) innovations, an announcement revealed.

The IC defines a regulatory sandbox as “a controlled environment with a system set up by a licensed insurance provider in collaboration with another person, natural or juridical, licensed or not by this Commission, that allows a small scale and live testing of technical innovations operating under special circumstances, allowances, and/or other limited and time-bound supervision.”

The IC’s Circular Letter No. 2020-73 sets out that all insurtech firms secure approval from the regulator before being adopted and implemented.

Non-regulated entities that want to join a sandbox will have to comply with the IC’s regulations first and submit an application.

A regulatory sandbox will be implemented in experimental cycles not exceeding one year each, and can be extended for a period not more than six months. Applications for a regulatory sandbox will be submitted to and processed by the commission’s Regulation, Enforcement, and Prosecution Division (REPD).

Successful applicants are required to submit a monthly written report to the IC through the REPD.