Wearable devices could soon become part of the insurance policy framework, as the sectoral regulator Irdai has formed a working group seeking inputs to bring such gadgets under guidelines keeping in view interest of policyholders.
Use of wearable gadgets, specially among health enthusiasts, alongside health apps on mobile phones is on the rise as people find these devices handy to track their physical activities and health status.
The 10-member working group headed by Insurance Regulatory and Development Authority of India (Irdai) Chief General Manager Yegnapriya Bharath will examine the role of innovation in insurance involving wearable/portable devices.
"Use of wearable and/or portable devices in insurance is a subject that frequently comes up in the context of financial technology (fintech)," Irdai said in a notification.
Recognising the role of wellness in risk assessment and product design, Irdai said wearable devices could be used to measure personal fitness or incorporation of a healthy lifestyle both in the context of health and life insurance.
"It is important to understand technology trends and their various implications for insurance even while seeking to harness the potential and advantages they seem to offer. While encouraging innovation, the regulator must run alongside it, keeping in view the interests of the policyholders," Irdai said.
Under the terms of reference of the working group, it will examine how technical advancements, particularly wearable and portable devices may be treated from the point of view of risk improvement, risk assessment and use of such devices as part of policy design.
Understanding practices of other jurisdictions in this area, suggesting a policy framework in view of interest of policyholders and studying various aspects impacting policy pricing are other terms of reference of the WG.
The WG has to submit its report alongside recommendations within two months.
Of the other participants in the WG, there are four more officials from Irdai and one each representative from LIC, New India Assurance Co, Bajaj Allianz General Insurance, Max Bupa Health Insurance and ICICI Pru Life Insurance.