Texas 2025 - 89th Regular

Texas House Bill HB4457 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R6190 RDS-D
2	2	By: Bhojani H.B. No. 4457
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to innovation waivers for certain insurance laws,
10	10	regulations, and requirements; authorizing a fee; creating an
11	11	administrative penalty.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Subtitle B, Title 2, Insurance Code, is amended
14	14	by adding Chapter 87 to read as follows:
15	15	CHAPTER 87. REGULATORY SANDBOX AND INNOVATION WAIVERS
16	16	Sec. 87.001. AUTHORITY TO GRANT WAIVERS. (a) The
17	17	commissioner may grant a waiver, including a variance, with respect
18	18	to any specific insurance law, regulation, or requirement if a
19	19	person subject to that law, regulation, or requirement demonstrates
20	20	to the commissioner's satisfaction that:
21	21	(1) application of the law, regulation, or requirement
22	22	would prohibit the introduction of an innovative or more efficient
23	23	insurance technology product or service, including an insurance
24	24	technology product or service that may enhance outcomes related to
25	25	pricing, coverage, or consumer experience, that the applicant
26	26	intends to offer during the period for which the proposed waiver is
27	27	granted;
28	28	(2) the public policy goals of the law, regulation, or
29	29	requirement will be or have been achieved by other means;
30	30	(3) the waiver will not substantially or unreasonably
31	31	increase any risk to consumers; and
32	32	(4) the waiver is in the public interest.
33	33	(b) The commissioner may not grant a waiver under this
34	34	chapter with respect to:
35	35	(1) any law, regulation, or requirement that is not
36	36	subject to the commissioner's jurisdiction;
37	37	(2) any law, regulation, or requirement concerning the
38	38	assets, deposits, investments, capital, surplus, or other solvency
39	39	requirements applicable to insurers;
40	40	(3) the required participation in any assigned risk
41	41	plan, residual market, or guaranty fund;
42	42	(4) any applicable provisions of this code related to
43	43	insurer authorization requirements or insurance trade practices;
44	44	(5) any law, regulation, or requirement required for
45	45	the department to maintain its accreditation by the National
46	46	Association of Insurance Commissioners unless the law, regulation,
47	47	or requirement permits variances or waivers;
48	48	(6) the application of any taxes or fees; or
49	49	(7) any other law, regulation, or requirement
50	50	determined ineligible by the commissioner.
51	51	(c) The authority granted to the commissioner under this
52	52	section may not be construed to:
53	53	(1) allow the commissioner to grant or extend a waiver
54	54	that would abridge the recovery rights of consumers; or
55	55	(2) limit or otherwise affect the authority of the
56	56	commissioner to exercise discretion to waive or enforce
57	57	requirements as permitted under any other law.
58	58	Sec. 87.002. APPLICATION FOR WAIVER. An application for a
59	59	waiver described by Section 87.001 must be in the form and manner
60	60	prescribed by the commissioner and include:
61	61	(1) the identity of the person applying for the
62	62	waiver;
63	63	(2) the identity of the directors and executive
64	64	officers of the applicant, any persons who are beneficial owners of
65	65	10 percent or more of the voting securities of the applicant, and
66	66	any individuals with authority to direct the management and
67	67	policies of the applicant;
68	68	(3) a description of the product or service to be
69	69	offered if the waiver is granted, including how the product or
70	70	service functions and the manner and terms under which it will be
71	71	offered;
72	72	(4) a description of the potential benefits to
73	73	consumers of the product or service;
74	74	(5) a description of the potential risks to consumers
75	75	posed by the product or service or the approval of the proposed
76	76	waiver and how the applicant proposes to mitigate such risks;
77	77	(6) an identification of each statutory or regulatory
78	78	provision that prohibits the introduction, sale, or offering of the
79	79	product or service;
80	80	(7) a filing fee in an amount determined by the
81	81	commissioner; and
82	82	(8) any additional information required by the
83	83	commissioner.
84	84	Sec. 87.003. PUBLIC NOTICE. (a) Not later than the 30th
85	85	day before the date the commissioner grants a waiver under this
86	86	chapter, the commissioner shall provide public notice of the
87	87	proposed waiver by publishing:
88	88	(1) each specific law, regulation, or requirement to
89	89	which the proposed waiver applies;
90	90	(2) the proposed terms and limitations of the proposed
91	91	waiver;
92	92	(3) the proposed duration of the proposed waiver; and
93	93	(4) any additional information considered appropriate
94	94	by the commissioner.
95	95	(b) If a waiver is granted under this chapter, the
96	96	commissioner shall provide public notice of the existence of the
97	97	waiver by providing:
98	98	(1) each specific law, regulation, or requirement to
99	99	which the waiver applies;
100	100	(2) the name of the person who applied for and received
101	101	the waiver;
102	102	(3) the duration of and any other terms or limitations
103	103	of the waiver; and
104	104	(4) any additional information considered appropriate
105	105	by the commissioner.
106	106	(c) The commissioner may satisfy a public notice
107	107	requirement under this section by publishing the information on the
108	108	department's Internet website.
109	109	Sec. 87.004. WAIVER LENGTH; EXTENSION. (a) The
110	110	commissioner may grant a waiver under this chapter for an initial
111	111	period not to exceed 12 months.
112	112	(b) Before the end of the initial waiver period, the
113	113	commissioner may grant a one-time extension of the waiver not to
114	114	exceed an additional 12 months.
115	115	(c) Not later than the 30th day before the end of the initial
116	116	waiver period, the person who received the waiver may apply to the
117	117	commissioner for an extension of the waiver in the form and manner
118	118	prescribed by the commissioner. The extension application must
119	119	include the length of the extension period requested and specific
120	120	reasons why the extension is necessary.
121	121	(d) The commissioner shall grant or deny an extension
122	122	request before the end of the initial waiver period.
123	123	Sec. 87.005. CONTESTED CASE PROVISIONS NOT APPLICABLE. The
124	124	commissioner's decision to grant or deny a waiver or extension
125	125	under this chapter is not subject to the contested case provisions
126	126	of Chapter 2001, Government Code.
127	127	Sec. 87.006. WAIVER TERMS AND LIMITATIONS. (a) A waiver
128	128	granted under this chapter must include any terms and limitations
129	129	determined appropriate by the commissioner, including limits on the
130	130	amount of premium that may be written in relation to the underlying
131	131	product or service and the number of consumers that may purchase or
132	132	use the underlying product or service.
133	133	(b) A violation of the terms and limitations described by
134	134	Subsection (a) is considered a violation of this chapter for
135	135	purposes of enforcement under this subtitle.
136	136	(c) A person who receives a waiver under this chapter may
137	137	not sell or provide a product or service subject to the waiver to
138	138	more than 10,000 consumers.
139	139	Sec. 87.007. WRITTEN DISCLOSURES. A product or service
140	140	offered under a waiver granted under this chapter must include the
141	141	following written disclosures to consumers in a clear and
142	142	conspicuous form:
143	143	(1) the name and contact information of the person
144	144	providing the product or service;
145	145	(2) that the product or service is authorized under an
146	146	innovation waiver for a temporary period of time and may be
147	147	discontinued at the end of the waiver period, the date of which must
148	148	be specified;
149	149	(3) contact information for the department, including
150	150	the method for a consumer to file a complaint with the department
151	151	regarding the product or service; and
152	152	(4) any additional disclosures required by the
153	153	commissioner.
154	154	Sec. 87.008. FINANCIAL RESPONSIBILITY REQUIREMENTS. A
155	155	person who receives a waiver under this chapter shall possess or
156	156	obtain one or a combination of the following forms of security in an
157	157	amount and subject to conditions and purposes determined by the
158	158	commissioner to be necessary for the protection of consumers:
159	159	(1) a contractual liability insurance policy;
160	160	(2) a surety bond issued by an authorized surety;
161	161	(3) securities of the type eligible for deposit by
162	162	authorized insurers in this state;
163	163	(4) evidence that the person has established an
164	164	account payable to the commissioner in a federally insured
165	165	financial institution in this state and has deposited United States
166	166	currency in an amount equal to the amount required by the
167	167	commissioner that is not available for withdrawal except by direct
168	168	order of the commissioner;
169	169	(5) a letter of credit issued by a qualified United
170	170	States financial institution; or
171	171	(6) another form of security authorized by the
172	172	commissioner.
173	173	Sec. 87.009. REVOCATION OF WAIVER; ADMINISTRATIVE PENALTY.
174	174	(a) The commissioner may revoke a waiver if:
175	175	(1) the person who obtains the waiver fails to comply
176	176	with this chapter, a rule adopted under this chapter, or any terms
177	177	or limitations for the waiver prescribed by the commissioner; or
178	178	(2) the waiver is causing consumer harm.
179	179	(b) A person who obtains a waiver and fails to comply with
180	180	this chapter, a rule adopted under this chapter, or any terms or
181	181	limitations for the waiver prescribed by the commissioner is
182	182	subject to an administrative penalty imposed under Chapter 84 of
183	183	not more than $1,000.
184	184	Sec. 87.010. ADOPTION OF RULES. (a) The commissioner by
185	185	rule shall adopt procedures for the submission, granting, denying,
186	186	monitoring, and revocation of a waiver under this chapter.
187	187	(b) The rules must:
188	188	(1) provide requirements for the ongoing monitoring,
189	189	examination, and supervision of, and quarterly reporting by, each
190	190	person granted a waiver under this chapter;
191	191	(2) permit the commissioner to impose reasonable terms
192	192	or limitations on the conduct permitted under a waiver;
193	193	(3) provide for an expedited application process for a
194	194	product or service that is substantially similar to one for which a
195	195	waiver has previously been granted by the commissioner; and
196	196	(4) include an opportunity for public comment on
197	197	proposed waivers under consideration by the commissioner.
198	198	Sec. 87.011. EFFECT OF WAIVER EXPIRATION OR REVOCATION. On
199	199	the expiration or revocation of a waiver granted under this
200	200	chapter, the person who received the waiver shall cease all
201	201	activities that were permitted only as a result of the waiver and
202	202	comply with all applicable laws.
203	203	Sec. 87.012. REPORT. Not later than January 1 of each year,
204	204	the commissioner shall submit a report to the governor, lieutenant
205	205	governor, speaker of the house of representatives, and chairs of
206	206	the house and senate standing committees with primary jurisdiction
207	207	over the department providing:
208	208	(1) the total number of applications for waivers under
209	209	this chapter that have been received, granted, and denied by the
210	210	commissioner;
211	211	(2) the information specified by Section 87.003(b) for
212	212	each waiver granted;
213	213	(3) a list of any regulations or requirements that
214	214	have been adopted or amended as a result of or in connection with a
215	215	waiver granted under this chapter;
216	216	(4) with respect to each law to which a waiver applies,
217	217	the commissioner's recommendation as to whether that law should be
218	218	continued, repealed, or amended to promote innovation and establish
219	219	a uniform regulatory system for all regulated entities; and
220	220	(5) a list of any waivers that have lapsed or been
221	221	revoked, and, if revoked, a description of other regulatory or
222	222	disciplinary actions, if any, that resulted in, accompanied, or
223	223	resulted from that revocation.
224	224	Sec. 87.013. RECIPROCITY. The commissioner may enter into
225	225	agreements with other states that have enacted laws that are
226	226	substantially similar to this chapter to:
227	227	(1) advance the purposes of this chapter; and
228	228	(2) facilitate the consideration of applications for
229	229	waivers under this chapter from persons who have:
230	230	(A) satisfied the requirements of this chapter;
231	231	and
232	232	(B) received similar waivers in other states.
233	233	SECTION 2. As soon as practicable after the effective date
234	234	of this Act, the commissioner of insurance shall adopt rules
235	235	necessary to implement this Act.
236	236	SECTION 3. This Act takes effect September 1, 2025.