Insurance Innovation Waiver Bill Signed by Governor
Montpelier, Vt. – Monday, Governor Phil Scott signed S.131, an act relating to the creation of an insurance “regulatory sandbox” that permits the Commissioner of Financial Regulation to grant limited-duration innovation waivers.
The waivers are designed to enable companies to offer innovative or more efficient insurance products and services to Vermont consumers. With this legislation, Vermont becomes one of only two states to offer this incentive for insurance innovation.
“This program will show insurers and the businesses and individuals they serve that Vermont is open to innovation,” said Governor Scott. “We hope this program will allow insurers the opportunity to bring to market new types of products that provide significant benefits to Vermont consumers and our economy.”
The program allows the commissioner to waive, for a specific time period, a limited set of statutory and regulatory requirements that might otherwise inhibit new and innovative products or services.
Innovation waivers may be granted if a company demonstrates a waiver is in the public interest and will not substantially increase risk to consumers. Additional robust consumer protections are included in the law.
According to Commissioner Michael Pieciak, “although companies may be granted temporary relief from certain statutory or regulatory requirements under this program, they will also be subject to enhanced regulatory oversight during the waiver period.”
Innovation waivers are temporary; at the end of a waiver period, a company must cease offering the product or service and comply with all applicable laws and regulations.
Deputy Commissioner of Insurance Kevin Gaffney explained that, “if a product completes a successful test under a waiver, the Department could determine that statutory change is warranted and propose appropriate legislation to allow the insurance product or service to be offered on a permanent basis.”
The Department anticipates it will begin accepting applications for innovation waivers by the end of 2019 once the operative regulations are adopted.