Texas 2023 - 88th Regular

Texas House Bill HB2017 Compare Versions

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1	1	88R8060 KBB-F
2	2	By: Oliverson H.B. No. 2017
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to innovation waivers for certain insurance laws,
8	8	regulations, and requirements; authorizing a fee.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle B, Title 2, Insurance Code, is amended
11	11	by adding Chapter 87 to read as follows:
12	12	CHAPTER 87. REGULATORY SANDBOX AND INNOVATION WAIVERS
13	13	Sec. 87.001. AUTHORITY TO GRANT WAIVERS. (a) The
14	14	commissioner may grant a waiver, including a variance, with respect
15	15	to any specific insurance law, regulation, or requirement if a
16	16	person subject to that law, regulation, or requirement demonstrates
17	17	to the commissioner's satisfaction that:
18	18	(1) application of the law, regulation, or requirement
19	19	would prohibit the introduction of an innovative or more efficient
20	20	insurance product or service that the applicant intends to offer
21	21	during the period for which the proposed waiver is granted;
22	22	(2) the public policy goals of the law, regulation, or
23	23	requirement will be or have been achieved by other means;
24	24	(3) the waiver will not substantially or unreasonably
25	25	increase any risk to consumers; and
26	26	(4) the waiver is in the public interest.
27	27	(b) The commissioner may not grant a waiver under this
28	28	chapter with respect to:
29	29	(1) any law, regulation, or requirement that is not
30	30	subject to the commissioner's jurisdiction;
31	31	(2) any law, regulation, or requirement concerning the
32	32	assets, deposits, investments, capital, surplus, or other solvency
33	33	requirements applicable to insurers;
34	34	(3) the required participation in any assigned risk
35	35	plan, residual market, or guaranty fund;
36	36	(4) any applicable provisions of this code related to
37	37	insurer authorization requirements or insurance trade practices;
38	38	(5) any law, regulation, or requirement required for
39	39	the department to maintain its accreditation by the National
40	40	Association of Insurance Commissioners unless the law or regulation
41	41	permits variances or waivers;
42	42	(6) the application of any taxes or fees; or
43	43	(7) any other law, regulation, or requirement
44	44	determined ineligible by the commissioner.
45	45	(c) The authority granted to the commissioner under this
46	46	section may not be construed to:
47	47	(1) allow the commissioner to grant or extend a waiver
48	48	that would abridge the recovery rights of consumers; or
49	49	(2) limit or otherwise affect the authority of the
50	50	commissioner to exercise discretion to waive or enforce
51	51	requirements as permitted under any other law.
52	52	Sec. 87.002. APPLICATION FOR WAIVER. An application for a
53	53	waiver described by Section 87.001 must be in the form and manner
54	54	prescribed by the commissioner and include:
55	55	(1) the identity of the person applying for the
56	56	waiver;
57	57	(2) the identity of the directors and executive
58	58	officers of the applicant, any persons who are beneficial owners of
59	59	10 percent or more of the voting securities of the applicant, and
60	60	any individuals with authority to direct the management and
61	61	policies of the applicant;
62	62	(3) a description of the product or service to be
63	63	offered if the waiver is granted, including how the product or
64	64	service functions and the manner and terms under which it will be
65	65	offered;
66	66	(4) a description of the potential benefits to
67	67	consumers of the product or service;
68	68	(5) a description of the potential risks to consumers
69	69	posed by the product or service or the approval of the proposed
70	70	waiver and how the applicant proposes to mitigate such risks;
71	71	(6) an identification of each statutory or regulatory
72	72	provision that prohibits the introduction, sale, or offering of the
73	73	product or service;
74	74	(7) a filing fee in an amount determined by the
75	75	commissioner; and
76	76	(8) any additional information required by the
77	77	commissioner.
78	78	Sec. 87.003. PUBLIC NOTICE. (a) Not later than the 30th
79	79	day before the date the commissioner grants a waiver under this
80	80	chapter, the commissioner shall provide public notice of the
81	81	proposed waiver by publishing:
82	82	(1) each specific law, regulation, or requirement to
83	83	which the proposed waiver applies;
84	84	(2) the proposed terms and limitations of the proposed
85	85	waiver;
86	86	(3) the proposed duration of the proposed waiver; and
87	87	(4) any additional information considered appropriate
88	88	by the commissioner.
89	89	(b) If a waiver is granted under this chapter, the
90	90	commissioner shall provide public notice of the existence of the
91	91	waiver by providing:
92	92	(1) each specific law, regulation, or requirement to
93	93	which the waiver applies;
94	94	(2) the name of the person who applied for and received
95	95	the waiver;
96	96	(3) the duration of and any other terms or limitations
97	97	of the waiver; and
98	98	(4) any additional information considered appropriate
99	99	by the commissioner.
100	100	(c) The commissioner may satisfy a public notice
101	101	requirement under this section by publishing the information on the
102	102	department's Internet website.
103	103	Sec. 87.004. WAIVER LENGTH; EXTENSION. (a) The
104	104	commissioner may grant a waiver under this chapter for an initial
105	105	period not to exceed 12 months.
106	106	(b) Before the end of the initial waiver period, the
107	107	commissioner may grant a one-time extension of the waiver not to
108	108	exceed an additional 12 months.
109	109	(c) Not later than the 30th day before the end of the initial
110	110	waiver period, the person who received the waiver may apply to the
111	111	commissioner for an extension of the waiver in the form and manner
112	112	prescribed by the commissioner. The extension application must
113	113	include the length of the extension period requested and specific
114	114	reasons why the extension is necessary.
115	115	(d) The commissioner shall grant or deny an extension
116	116	request before the end of the initial waiver period.
117	117	Sec. 87.005. CONTESTED CASE PROVISIONS NOT APPLICABLE. The
118	118	commissioner's decision to grant or deny a waiver or extension
119	119	under this chapter is not subject to the contested case provisions
120	120	of Chapter 2001, Government Code.
121	121	Sec. 87.006. WAIVER TERMS AND LIMITATIONS. (a) A waiver
122	122	granted under this chapter must include any terms and limitations
123	123	determined appropriate by the commissioner, including limits on the
124	124	amount of premium that may be written in relation to the underlying
125	125	product or service and the number of consumers that may purchase or
126	126	use the underlying product or service.
127	127	(b) A violation of the terms and limitations described by
128	128	Subsection (a) is considered a violation of this chapter for
129	129	purposes of enforcement under this subtitle.
130	130	(c) A person who receives a waiver under this chapter may
131	131	not sell or provide a product or service subject to the waiver to
132	132	more than 10,000 consumers.
133	133	Sec. 87.007. WRITTEN DISCLOSURE. A product or service
134	134	offered under a waiver granted under this chapter must include the
135	135	following written disclosures to consumers in a clear and
136	136	conspicuous form:
137	137	(1) the name and contact information of the person
138	138	providing the product or service;
139	139	(2) that the product or service is authorized under an
140	140	innovation waiver for a temporary period of time and may be
141	141	discontinued at the end of the waiver period, the date of which must
142	142	be specified;
143	143	(3) contact information for the department, including
144	144	the method for a consumer to file a complaint with the department
145	145	regarding the product or service; and
146	146	(4) any additional disclosures required by the
147	147	commissioner.
148	148	Sec. 87.008. FINANCIAL RESPONSIBILITY REQUIREMENTS. A
149	149	person who receives a waiver under this chapter shall possess or
150	150	obtain one or a combination of the following forms of security in an
151	151	amount and subject to conditions and purposes determined by the
152	152	commissioner to be necessary for the protection of consumers:
153	153	(1) a contractual liability insurance policy;
154	154	(2) a surety bond issued by an authorized surety;
155	155	(3) securities of the type eligible for deposit by
156	156	authorized insurers in this state;
157	157	(4) evidence that the person has established an
158	158	account payable to the commissioner in a federally insured
159	159	financial institution in this state and has deposited United States
160	160	currency in an amount equal to the amount required by the
161	161	commissioner that is not available for withdrawal except by direct
162	162	order of the commissioner;
163	163	(5) a letter of credit issued by a qualified United
164	164	States financial institution; or
165	165	(6) another form of security authorized by the
166	166	commissioner.
167	167	Sec. 87.009. REVOCATION OF WAIVER. The commissioner may
168	168	revoke a waiver if:
169	169	(1) the person who obtains the waiver fails to comply
170	170	with this chapter, a rule adopted under this chapter, or any terms
171	171	or limitations for the waiver established by the commissioner; or
172	172	(2) the waiver is causing consumer harm.
173	173	Sec. 87.010. ADOPTION OF RULES. (a) The commissioner by
174	174	rule shall adopt procedures for the submission, granting, denying,
175	175	monitoring, and revocation of a waiver under this chapter.
176	176	(b) The rules must:
177	177	(1) provide requirements for the ongoing monitoring,
178	178	examination, and supervision of, and reporting by, each person
179	179	granted a waiver under this chapter;
180	180	(2) permit the commissioner to impose reasonable terms
181	181	or limitations on the conduct permitted under a waiver;
182	182	(3) provide for an expedited application process for a
183	183	product or service that is substantially similar to one for which a
184	184	waiver has previously been granted by the commissioner; and
185	185	(4) include an opportunity for public comment on
186	186	proposed waivers under consideration by the commissioner.
187	187	Sec. 87.011. EFFECT OF WAIVER EXPIRATION OR REVOCATION. On
188	188	the expiration or revocation of a waiver granted under this
189	189	chapter, the person who received the waiver shall cease all
190	190	activities that were permitted only as a result of the waiver and
191	191	comply with all applicable laws.
192	192	Sec. 87.012. REPORT. Not later than January 1 of each year,
193	193	the commissioner shall submit a report to the governor, lieutenant
194	194	governor, speaker of the house of representatives, and chairs of
195	195	the house and senate standing committees with primary jurisdiction
196	196	over the department providing:
197	197	(1) the total number of applications for waivers under
198	198	this chapter that have been received, granted, and denied by the
199	199	commissioner;
200	200	(2) the information specified by Section 87.003(b) for
201	201	each waiver granted;
202	202	(3) a list of any regulations or requirements that
203	203	have been adopted or amended as a result of or in connection with a
204	204	waiver granted under this chapter;
205	205	(4) with respect to each law to which a waiver applies,
206	206	the commissioner's recommendation as to whether that law should be
207	207	continued, repealed, or amended to promote innovation and establish
208	208	a uniform regulatory system for all regulated entities; and
209	209	(5) a list of any waivers that have lapsed or been
210	210	revoked, and, if revoked, a description of other regulatory or
211	211	disciplinary actions, if any, that resulted in, accompanied, or
212	212	resulted from that revocation.
213	213	Sec. 87.013. RECIPROCITY. The commissioner may enter into
214	214	agreements with other states that have enacted laws that are
215	215	substantially similar to this chapter to:
216	216	(1) advance the purposes of this chapter; and
217	217	(2) facilitate the consideration of applications for
218	218	waivers under this chapter from persons who have:
219	219	(A) satisfied the requirements of this chapter;
220	220	and
221	221	(B) received similar waivers in other states.
222	222	SECTION 2. As soon as practicable after the effective date
223	223	of this Act, the commissioner of insurance shall adopt rules
224	224	necessary to implement this Act.
225	225	SECTION 3. This Act takes effect September 1, 2023.