The National Insurance Commission (NAICOM) has released the insurance regulatory’s sandbox operational guidelines, to take effect from May 1, this year.

The guideline is to encourage innovation that would drive financial inclusion and positive competition.

This is expected to be used to test insurance solicitation or distribution; insurance products, underwriting, policy and claims servicing and any activity within the insurance value chain before making them public.

A sandbox is an isolated testing environment that enables users to run programmes or open files without affecting the application, system or platform on which they run.
Software developers use sandboxes to test new programming code. Cybersecurity professionals use sandboxes to test potentially malicious software. Without sandboxing, software or applications could have potentially unlimited access to all the user data and system resources on a network.
Sandboxes are also used to safely execute malicious code to avoid harming the host device, the network or other connected devices. Using a sandbox to detect malware offers an additional layer of protection against security threats, such as stealthy attacks and exploits that use zero-day vulnerabilities.

The Commissioner for Insurance, Mr. Sunday Thomas, stated that these guidelines are issued in view of the powers conferred on the Commission under the National Insurance Commission Act 1997 and the Insurance Act 2003.

He added that these guidelines should be read along with the provisions of the Insurance Act as well as other regulations, notices and circulars that the Commission might issue.
He said: “The guidelines shall come into effect May 1, 2023. It provides insurance institutions, other firms and persons the opportunity to test business models, products and services that will enhance efficiency in meeting consumers’needs; encourage innovation that will drive financial inclusion and positive competition and promote and deliver economic benefits, by lowering the cost of business operations.
“An applicant would be eligible to be considered for the sandbox after meeting these criteria: Must demonstrate the potential to advance inclusive insurance -The proposed product, service or solution is genuinely innovative with clear potential to advance the objectives of Inclusive Insurance by improving accessibility, efficiency, security and/or quality in the provision of insurance services to consumers in Nigeria.
“The applicant shall be a registered business in Nigeria; must have a Fit and Proper Management and Leadership; must demonstrate that it has conducted sufficient diligence to understand the potential risks and/or legal and regulatory requirements for deploying the proposed insurance product, service or solution.
“The commission will accept applications from insurers; insurance brokers; loss adjusters and any applicant as the Commission deems fit,” he noted.