HLS 24RS-658 ORIGINAL
2024 Regular Session
HOUSE BILL NO. 701
BY REPRESENTATIVE CARVER
INSURANCE DEPARTMENT: Creates the Insurance Regulatory Sandbox Act
1 AN ACT
2To enact Subpart M-1 of Part IV of Chapter 4 of Title 22 of the Louisiana Revised Statutes
3 of 1950, to be comprised of R.S. 22:1430.1 through 1430.4, relative to the regulation
4 of insurance; to create the Insurance Regulatory Sandbox Act; to provide for a short
5 title; to provide for innovation waivers; to provide requirements of applicants; to
6 provide relative to the authority of the commissioner of insurance; to provide for
7 consumer protections; to provide for disclosures; to provide for extensions of time;
8 to provide for rulemaking; to require reporting; to provide for reciprocity; to provide
9 for a termination date; to provide for an effective date; to provide for redesignation
10 of laws; and to provide for related matters.
11Be it enacted by the Legislature of Louisiana:
12 Section 1. Subpart M-1 of Part IV of Chapter 4 of Title 22 of the Louisiana Revised
13Statutes of 1950, comprised of R.S. 22:1430.1 through 1430.4, is hereby enacted to read as
14follows:
15 SUBPART M-1. INSURANCE REGULATORY SANDBOX ACT
16 §1430.1. Short Title
17 This Act shall be known and may be cited as the "Insurance Regulatory
18 Sandbox Act."
19 §1430.2. Regulatory sandbox and innovation waivers; application requirements;
20 fees; disclosures; prohibitions; rules; extensions
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1 A. The commissioner may grant a variance or waiver with respect to the
2 specific requirements of any insurance law, regulation, or bulletin if a person subject
3 to that law, regulation, or bulletin demonstrates all of the following to the
4 commissioner's satisfaction:
5 (1) The application of the law, regulation, or bulletin would prohibit the
6 introduction of an innovative or more efficient insurance product or service that the
7 applicant intends to offer during the period for which the proposed waiver is granted.
8 (2) The public policy goals of the law, regulation, or bulletin will be or have
9 been achieved by other means.
10 (3) The waiver will not substantially or unreasonably increase any risk to
11 consumers.
12 (4) The waiver is in the public interest.
13 B. A person shall include in an application for innovation waiver all of the
14 following:
15 (1) The identity of the person applying for the waiver.
16 (2) The identity of the directors and executive officers of the applicant, any
17 persons who are beneficial owners of ten percent or more of the voting securities of
18 the applicant, and any individuals with power to direct the management and policies
19 of the applicant.
20 (3) A description of the product or service to be offered if the waiver is
21 granted, including how the product or service functions, and the manner and terms
22 on which it will be offered.
23 (4) A description of the potential benefits to consumers of the product or
24 service.
25 (5) A description of the potential risks to consumers posed by the product or
26 service or the approval of the proposed waiver and how the applicant proposes to
27 mitigate such risks.
28 (6) An identification of the statutory or regulatory provision that prohibits
29 the introduction, sale, or offering of the product or service.
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HB NO. 701
1 (7) A filing fee in an amount determined by the commissioner.
2 (8) Any additional information required by the commissioner.
3 C.(1) If approved by the commissioner, an innovation waiver shall be
4 granted for an initial period of up to three years.
5 (2) Prior to the end of the initial waiver period, the commissioner may grant
6 a one-time extension for up to an additional three years. If a person requests to
7 extend a waiver, the person shall make an extension request to the commissioner at
8 least thirty days prior to the end of the initial waiver period and shall include the
9 length of the extension period requested and specific reasons why the extension is
10 necessary. The commissioner shall grant or deny an extension request before the end
11 of the initial waiver period.
12 D. The commissioner shall include in an innovation waiver any terms,
13 conditions, and limitations deemed appropriate by the commissioner, including limits
14 on the amount of premium that may be written in relation to the underlying product
15 or service and the number of consumers that may purchase or utilize the underlying
16 product or service, provided that in no event shall a product or service subject to an
17 innovation waiver be purchased or utilized by more than ten thousand consumers.
18 E. A person offering a product or service pursuant to an innovation waiver
19 shall clearly and conspicuously disclose to consumers all of the following:
20 (1) The name and contact information of the person providing the product
21 or service.
22 (2) That the product or service is authorized pursuant to an innovation
23 waiver for a temporary period of time and may be discontinued at the end of the
24 waiver period, the date of which shall be specified.
25 (3) Contact information for the department, including how a consumer may
26 file a complaint with the department regarding the product or service.
27 (4) Any additional disclosures required by the commissioner.
28 F. The commissioner's decision to grant or deny a waiver or extension shall
29 not be subject to the contested-case provisions of the Administrative Procedure Act.
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1 G.(1) The commissioner shall not grant a waiver with respect to any of the
2 following:
3 (a) Any law, regulation, bulletin, or other provision that is not subject to the
4 commissioner's jurisdiction pursuant to the Louisiana Insurance Code.
5 (b) Any law, regulation, bulletin, or other provision concerning the assets,
6 deposits, investments, capital, surplus, or other solvency requirements applicable to
7 insurers.
8 (c) The required participation in any assigned risk plan, residual market, or
9 guaranty fund.
10 (d) Requirements with respect to insurance licensing, insurance trade
11 practices, or particular lines of insurance or insurance products.
12 (e) Any law, regulation, or bulletin required for the department to maintain
13 its accreditation by the National Association of Insurance Commissioners unless the
14 law or regulation permits variances or waivers.
15 (f) The application of any taxes or fees.
16 (g) Any other law, regulation, or bulletin deemed ineligible by the
17 commissioner.
18 (2) The commissioner shall not grant or extend a waiver that would abridge
19 the recovery rights of consumers.
20 H. A person who receives a waiver pursuant to this Section shall possess or
21 obtain one or a combination of the following in an amount subject to conditions and
22 purposes the commissioner determines necessary for the protection of consumers:
23 (1) A contractual liability insurance policy.
24 (2) A surety bond issued by an authorized surety.
25 (3) Securities of the type eligible for deposit by authorized insurers in this
26 state.
27 (4) Evidence that the applicant has established an account payable to the
28 commissioner in a federally insured financial institution in this state and has
29 deposited money of the United States in an amount equal to an amount required by
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1 the commissioner that is not available for withdrawal except by direct order of the
2 commissioner.
3 (5) A letter of credit issued by a qualified financial institution as defined in
4 R.S. 22:512.
5 (6) Another form of security authorized by the commissioner
6 I.(1) At least thirty days prior to granting an innovation waiver, the
7 commissioner shall provide public notice of the draft waiver by publishing all of the
8 following information:
9 (a) The specific statute, regulation, or bulletin to which the draft waiver
10 applies.
11 (b) The proposed terms, conditions, and limitations of the draft waiver.
12 (c) The proposed duration of the draft waiver.
13 (d) Any additional information deemed appropriate by the commissioner.
14 (2) The commissioner may satisfy the notice requirement of this Subsection
15 by publication on the department's website.
16 J.(1) If a waiver is granted pursuant to this Section, the commissioner shall
17 provide public notice of the existence of the waiver by providing all of the following
18 information:
19 (a) The specific statute, regulation, or bulletin to which the waiver applies.
20 (b) The name of the person who applied for and received the waiver.
21 (c) The duration of and any other terms, conditions, or limitations of the
22 waiver.
23 (d) Any additional information deemed appropriate by the commissioner.
24 (2) The commissioner may satisfy the notice requirement of this Subsection
25 by publication on the department's website.
26 K.(1) The commissioner may revoke a waiver if the person who obtains the
27 waiver fails to comply with any terms, conditions, or limitations established by the
28 commissioner or the requirements of this Section or if the waiver is causing
29 consumer harm.
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1 (2) In addition to any other penalties permitted by law, the commissioner
2 may impose a fine of not more than one thousand dollars on any person who obtains
3 a waiver who fails to comply with any terms, conditions, or limitations established
4 by the commissioner or the requirements of this Section.
5 L.(1) In accordance with the Administrative Procedure Act, the
6 commissioner shall adopt rules and procedures for the submission, granting, denying,
7 monitoring, and revocation of petitions for a waiver pursuant to this Section. The
8 commissioner shall set forth in the procedures all of the following:
9 (a) The requirements for the ongoing monitoring, examination, supervision
10 of, and reporting by, each person granted a waiver pursuant to this Section.
11 (b) An expedited application process for a product or service that is
12 substantially similar to one for which a waiver has previously been granted by the
13 commissioner.
14 (c) Procedure that provides an opportunity for public comment on draft
15 waivers under consideration by the commissioner.
16 (2) The commissioner may attach reasonable conditions or limitations on the
17 conduct permitted pursuant to a waiver.
18 (3) The commissioner may adopt any other rules necessary to effectuate the
19 purposes of this Subpart.
20 M. Upon expiration of an innovation waiver, the person who obtained the
21 waiver shall cease all activities that were permitted only as a result of the waiver and
22 comply with all generally applicable laws and regulations.
23 N. The commissioner's authority to grant a waiver pursuant to this Section
24 does not limit or otherwise affect his authority to exercise discretion to waive or
25 enforce requirements pursuant to any other law of the Louisiana Insurance Code or
26 applicable administrative regulations.
27 O. On or before January first of each calendar year, the commissioner shall
28 submit a report annually to the Senate Committee on Insurance and the House
29 Committee on Insurance providing all of the following information:
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1 (1) The total number of applications for waivers that have been received,
2 granted, and denied by the commissioner.
3 (2) For each waiver granted by the commissioner, the information specified
4 pursuant to Paragraph (J)(1) of this Section.
5 (3) A list of any regulations or bulletins that have been adopted or amended
6 as a result of or in connection with a waiver granted pursuant to this Section.
7 (4) With respect to each statute to which a waiver applies, the
8 commissioner's recommendation as to whether such statute should be continued,
9 eliminated, or amended in order to promote innovation and establish a uniform
10 regulatory system for all regulated entities.
11 (5) A list of any waivers that have lapsed or been revoked and, if revoked,
12 a description of other regulatory or disciplinary actions, if any, that resulted in,
13 accompanied, or resulted from such revocation.
14 P. The commissioner shall not grant new waivers or extensions after June 30,
15 2029.
16 §1430.3. Reciprocity
17 The commissioner may enter into agreements with other states that have
18 enacted laws substantially similar to this Subpart in order to advance the purposes
19 of this Subpart and to facilitate the consideration of applications for innovation
20 waivers from persons who have satisfied the requirements of this Subpart and
21 received similar waivers in other states.
22 §1430.4. Effectiveness of Subpart
23 This Subpart shall terminate on June 30, 2029.
24 Section 2. This Act shall become effective upon signature by the governor or, if not
25signed by the governor, upon expiration of the time for bills to become law without signature
26by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
27vetoed by the governor and subsequently approved by the legislature, this Act shall become
28effective on the day following such approval.
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1 Section 3. The Louisiana State Law Institute is hereby directed to redesignate
2Subpart M of Part IV of Chapter 4 of Title 22 of the Louisiana Revised Statutes of 1950,
3comprised of R.S. 22:1431, as "Subpart M-2. Portable Electronics".
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 701 Original 2024 Regular Session Carver
Abstract: Creates the Insurance Regulatory Sandbox Act.
Proposed law (R.S. 22:1430.1 and 1430.2) provides for regulatory sandbox and innovation
waivers to allow persons to introduce insurance products or services for a certain period of
time. Authorizes the commissioner of insurance (commissioner) to grant a variance or
waiver with respect to specific requirements of any insurance law, regulation, or bulletin if
a person demonstrates that the application of the law, regulation, or bulletin would prohibit
the introduction of an innovative or more efficient insurance product or service that the
applicant intends to offer during the period for which the proposed waiver is granted.
Proposed law provides other facets for applicants to demonstrate for purposes of applying
for a waiver, including but not limited to showing that the waiver will not substantially or
unreasonably increase risks to consumers and the waiver is in the public interest.
Proposed law requires certain information in applications for innovation waivers, including
but not limited to the identity of the person applying for the waiver, identities of the
applicant's directors and executive officers, any persons who are beneficial owners of 10 %
or more of the voting securities of the applicant, and any individuals with power to direct the
management and policies of the applicant. Further requires an application fee in an amount
determined by the commissioner.
Proposed law authorizes the commissioner to grant a waiver for an initial period of up to 3
years. Authorizes the commissioner to grant a one-time extension for up to an additional 3
years. Requires a person requesting an extension to request the extension at least 30 days
prior to the end of the initial waiver period. Further requires the commissioner to grant or
deny an extension request before the end of the initial waiver period.
Proposed law requires the commissioner to include terms, conditions, and limitations
deemed appropriate within the innovation waiver, including certain limits regarding written
premiums and consumer utilization. Further prohibits a product or service subject to an
innovation waiver to be purchased or utilized by more than 10,000 consumers.
Proposed law requires a person offering a product or service by innovation waiver to clearly
and conspicuously disclose certain information to consumers, including but not limited to
the name and contact information of the person providing the product or service, the product
or service authorized by an innovation waiver for a temporary period of time, contact
information for the La. Dept. of Insurance (LDI), including how a consumer may file a
complaint with LDI regarding the product or service, and other disclosures required by the
commissioner.
Proposed law provides that the commissioner's decision to grant or deny a waiver or
extension is not subject to the contested-case provisions of the APA.
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HB NO. 701
Proposed law prohibits the commissioner from granting a waiver under certain
circumstances, including but not limited to laws, regulations, or bulletins that are not subject
to the commissioner's jurisdiction under the La. Insurance Code, the application of taxes or
fees, and any other law deemed ineligible by the commissioner. Further prohibits the
commissioner from granting or extending waivers that abridge consumers' recovery rights
Proposed law requires a person receiving a waiver to possess or obtain certain financial
securities.
At least 30 days prior to granting an innovation waiver, proposed law requires the
commissioner to provide public notice of the draft waiver by publishing certain information
regarding the draft waiver. Further authorizes publication on LDI's website.
Proposed law requires the commissioner to provide public notice of a granted waiver by
publishing certain information regarding the waiver. Further authorizes publication on LDI's
website.
Proposed law authorizes the commissioner to revoke a waiver if the person who obtains the
waiver fails to comply with any terms, conditions, or limitations established by the
commissioner or proposed law or if use of the waiver is causing consumer harm.
Proposed law authorizes the commissioner to impose a fine of not more than $1,000 on a
person granted a waiver who fails to comply with any terms, conditions, or limitations
established by the commissioner. Further authorizes other penalties permitted by law.
Proposed law requires the commissioner to adopt rules in accordance with the APA for the
submission, granting, denying, monitoring, and revocation of petitions for a waiver.
Requires other specific rules and authorizes the commissioner to adopt any other rules
necessary to effectuate proposed law.
Proposed law requires a person granted an innovation waiver, upon expiration of the waiver,
to cease all activities that were permitted only as a result of the waiver.
Proposed law provides that the commissioner's authority to grant a waiver does not limit or
affect his discretion to waive or enforce requirements pursuant to any present law of the La.
Insurance Code or applicable administrative regulations.
Proposed law requires the commissioner to annually submit a report on Jan. 1
st
to the Senate
and House committees on insurance and requires reporting of certain information, including
but not limited to the total number of applications for waivers the commissioner has
received, granted, and denied, a list of regulations or bulletins that have been adopted or
amended as a result of the waiver, and the commissioner's recommendation as to whether
such statute should be continued, eliminated, or amended in order to promote innovation and
establish a uniform regulatory systems for all regulated entities.
Proposed law prohibits the commissioner from granting new waivers or extensions after June
30, 2029.
Proposed law (R.S. 22:1430.3) authorizes the commissioner to make agreements with other
states with laws substantially similar to proposed law to advance proposed law and consider
applications for innovation waivers from persons who have received similar waivers in other
states.
Proposed law (R.S. 22:1430.4) terminates on June 30, 2029.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Adds R.S. 22:1430.1 - 1430.4)
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