IRA regulating for innovation – Case study
The enactment of a new Insurance Act, which came into operation in early 2018, expanded the Insurance Regulatory Authority (IRA)’s mandate from market soundness and consumer protection to also include market development. As part of this new mandate, the IRA is committed to encourage and facilitate innovation in its market. However, encouraging innovation may introduce new risks, thereby leading to conflict between the different mandates. To strike the right balance, the IRA recognised that it needed to update some of its existing supervisory processes and regulations, plus introduce new tools to steer its interaction with the market.
To assess the changes and adaptations that it needed to make, the IRA required an understanding of the challenges and barriers to innovation in its market. The IRA therefore partnered with FSD Uganda and Cenfri to, through an interactive, consultative process, conduct a market innovation gap assessment to identify the specific challenges the market was facing, a regulatory assessment and an institutional assessment of the IRA to identify adaptations and new tools that could be adopted that would fit within the realities, processes and constraints of the IRA.
From this initial assessment, completed in mid-2019, the IRA has focused on four major areas to enhance the enabling environment for innovation in Uganda:
- Increasing its available communication channels to both existing industry players and potential new entrants that focus on engagement and discussion around innovation.
- Increasing direct engagement with the fintech sector.
- Evolving the product approval process.
- Adapting regulation and enhancing licensing options with the regulatory sandbox guidelines