GFIA has provided feedback on the Organisation for Economic Co-operation and Development's (OECD) draft report, Technology and Innovation in the Insurance Sector.
While acknowledging that technological advances are having a significant effect on the insurance industry, GFIA said current insurance legislation and regulations could limit the capabilities of insurers in some jurisdictions to fulfil their potential. As such, GFIA said that the pace of policy and regulations should match the speed of change. It also stressed that for innovation to occur, it is important for the regulatory framework to be technology-agnostic.
Regarding the proliferation of insurtech, GFIA warned against government responses that create a two-tier system of regulations, whereby established insurers are at a disadvantage relative to start-ups.
GFIA also noted that some insurers have expressed interest in the development of a regulatory sandbox, whereby regulatory standards are relaxed to encourage the development of innovative products that benefit both insurers and consumers. However, for this sandbox to work, GFIA said it would be vital to maintain a level playing field between incumbents and new entrants.