Connecticut 2022 2022 Regular Session

Connecticut Senate Bill SB00482 Introduced / Fiscal Note

Filed 04/25/2022

                    OFFICE OF FISCAL ANALYSIS 
Legislative Office Building, Room 5200 
Hartford, CT 06106  (860) 240-0200 
http://www.cga.ct.gov/ofa 
sSB-482 
AN ACT ESTABLISHING THE FINTECH REGULATORY SANDBOX 
PROGRAM AND THE INSURTECH REGULATORY SANDBOX 
INITIATIVE.  
 
Primary Analyst: LG 	4/25/22 
Contributing Analyst(s): ME, MP   
 
 
 
 
OFA Fiscal Note 
 
State Impact: 
Agency Affected Fund-Effect FY 23 $ FY 24 $ 
Banking Dept. 	BF - Cost 180,163 to 
200,163 
180,163 to 
200,163 
Banking Dept. 	BF - Revenue 
Loss 
See Below See Below 
Banking Dept. 	BF - Revenue 
Gain 
See Below See Below 
Resources of the General Fund GF - Potential 
Revenue Gain 
See Below See Below 
Department of Emergency 
Services and Public Protection 
Applicant 
Fingerprint Card 
Submission 
Account - 
Potential 
Revenue Gain 
See Below See Below 
Insurance Dept. 	IF - Cost 201,000 to 
221,000 
201,000 to 
221,000 
Note: GF=General Fund; IF=Insurance Fund; BF=Banking Fund 
  
Municipal Impact: None  
Explanation 
This bill establishes a Fintech Regulatory Sandbox program and 
requires the Insurance Commissioner, in consultation with the CTNext 
board of directors, to establish an Insurtech Regulatory Sandbox 
initiative. The bill is anticipated to result in costs, revenue gain, and 
revenue loss to the Department of Banking (DOB), potential revenue 
gain to the Department of Emergency Services and Public Protection  2022SB-00482-R000622-FN.DOCX 	Page 2 of 3 
 
 
(DESPP) and the General Fund, and costs to the Insurance Department 
(DOI). The bill also establishes an 11-member Innovation Council within 
the DOB to oversee the Fintech program. The fiscal impact of the bill is 
described by section below.  
Section 1 establishes the Fintech Regulatory Sandbox program. 
While licensing fees may vary by type and agency, DOB consumer 
credit licensing fees are approximately $1,000 annually. To the extent 
fewer licenses are issued as a result of this program, there is a potential 
revenue loss to the DOB.  
This section also establishes an Innovation Council and requires them 
to prescribe the application process and amount of the application fee 
for the Fintech program. The bill also permits the council to impose a 
participation fee, and other additional fees, on each applicant approved 
for the program. This results in a potential revenue gain to DOB, which 
is dependent on the fee amounts and number of fees.  
The Innovation Council may also require certain applicants and their 
employees involved with the innovative products to complete a 
criminal history records check resulting in a potential revenue gain to 
the General Fund and the Applicant Fingerprint Card Submission 
Account. The DESPP conducts state background checks for $75 per 
person and to the extent additional background checks are requested 
there is a potential revenue gain to the state. State background checks 
require fingerprinting, which DESPP conducts for $15 per person 
resulting in a potential revenue gain to the Applicant Fingerprint Card 
Submission Account
1
. 
Members of the Innovation Council are required to serve without 
compensation but will be reimbursed for necessary expenses incurred 
when performing their duties within available funds. As the bill allows 
for expenses without detailing what constitutes an eligible expense, 
there may be associated costs that are uncertain at this time. The DOB 
 
1
 Funds in the Applicant Fingerprint Card Submission Account are used for IT support 
and maintenance for the fingerprinting systems.  2022SB-00482-R000622-FN.DOCX 	Page 3 of 3 
 
 
may also incur costs of up to $20,000 in Other Expenses for marketing 
and communication which will be dependent on the methods the 
Innovation Council uses to publicize the program.  
It is anticipated that DOB will require one Staff Attorney 2 position 
to provide support for the Fintech Regulatory Sandbox program as DOB 
currently does not have the expertise to provide oversight required by 
this bill. The salary range for a Staff Attorney 2 is $90,203 - $115,434. 
Based on the starting salary and fringe benefit rate charged to the 
Banking Fund
2
, this position has an annualized cost of approximately 
$180,163 to the Banking Fund in FY 23 and FY 24.  
Section 2, which requires the Insurance Department to establish an 
Insurtech Regulatory Sandbox, results in an annual cost of between 
$201,000 and $221,000 to the Insurance Fund in FY 23 and FY 24.  It is 
anticipated that the Insurance Department will need to hire a new 
Insurance Program Manager beginning July 1, 2023, to establish and 
oversee the initiative at annual cost of $100,585 for salary and $100,313 
for fringe benefits
2
. The Insurance Department may also incur costs of 
up to $20,000 for marketing and communications to the extent the 
agency elects to publicize the program. 
The Out Years 
The annualized ongoing fiscal impact identified above would 
continue into the future subject to the number of foregone licenses, the 
program fees collected, the number of background checks, and changes 
to employee wage and benefit costs. Any costs for marketing and 
communications are anticipated to decrease in the out years after the 
programs are well established.  
Sources: Core-CT Financial Accounting System 
 
 
2
 The fringe benefit costs for employees funded out of other appropriated funds are 
budgeted within the fringe benefit account of those funds, as opposed to the fringe 
benefit accounts within the Office of the State Comptroller. The estimated active 
employee fringe benefit cost associated with most personnel changes for other 
appropriated fund employees is 99.73% of payroll in FY 23.