33-2-2501. (Temporary) Regulatory sandbox waiver -- property or casualty insurers -- application -- considerations by the commissioner -- limitations -- rulemaking. (1) The commissioner may grant a variance or waiver with respect to the requirements of an insurance law or rule if a property or casualty insurer, subject to that law or rule, demonstrates to the satisfaction of the commissioner that:

(a) the application of the law or rule would prohibit the introduction of an innovative or more efficient insurance product or service that the applicant intends to offer during the period the variance or waiver is granted;

(b) the public policy goals of the law or rule may be achieved by other means;

(c) the waiver may not substantially increase any risk to consumers;

(d) the waiver may not cause a material negative impact to the insurer in matters including but not limited to solvency; and

(e) the waiver is in the public interest.

(2) An application for a waiver must include the following information:

(a) the identity of the insurer applying for the waiver;

(b) the identity of the directors and executive officers of the insurer, any persons who are beneficial owners of 10% or more of the voting securities of the insurer, and any individuals with power to direct the management and policies of the insurer;

(c) a description of the product or service to be offered if the waiver is granted, including how the product or service functions and the manner and terms on which it must be offered;

(d) a description of the potential benefits to consumers of the product or service;

(e) a description of the potential risks, including but not limited to financial risks, to consumers posed by the product or service or approval of the proposed waiver and how the applicant proposes to mitigate the risks;

(f) a statement that the insurer has a physical presence in the state and has a certificate of authority issued by the commissioner to write insurance in the state;

(g) a filing fee of $1,000 unless the submission is complex and lengthy, in which case the commissioner may provide an estimate of the fee that is commensurate with regulatory costs for consideration of the submission. The insurer may withdraw the submission after receiving the estimate.

(h) if applicable, a request to segregate and protect from disclosure any confidential trade secrets in the application must be stated in the application with the confidential information specifically identified for the commissioner; and

(i) any additional information required by the commissioner.

(3) (a) If approved by the commissioner, an innovation waiver must be granted for an initial period of up to 3 years.

(b) Prior to the end of the waiver period, the commissioner may grant an extension for up to an additional 3 years. An extension request must be made to the commissioner at least 45 days prior to the end of the initial waiver period and must include the length of the extension period requested and specific reasons why the extension is necessary. The commissioner shall grant or deny an extension request before the end of the initial waiver period.

(4) A waiver must include any terms, conditions, or limitations considered appropriate by the commissioner, including limits on the amount of premium that may be written in relation to the underlying product or service and the number of consumers that may purchase or utilize the underlying product or service, provided that a product or service subject to an innovation waiver may not be purchased or utilized by more than 10,000 insureds. It is not an unlawful discriminatory practice by an insurer to refuse to provide a product or service subject to an innovation waiver when there is a legitimate basis to refuse to provide a product or service that is tied to the limitations or purpose supporting the waiver.

(5) A product or service offered pursuant to an innovation waiver must include the following written disclosures to consumers in clear and conspicuous form:

(a) the name and contact information for the representative of the insurer providing the product or service;

(b) that the product or service is authorized pursuant to an innovation waiver for a temporary period of time and may be discontinued at the end of the waiver period, the date of which must be specified;

(c) contact information for the commissioner, including how a consumer may file a complaint with the commissioner regarding the product or service; and

(d) any additional disclosures required by the commissioner.

(6) (a) The commissioner shall either grant or deny a waiver within 90 days of receipt of a completed request.

(b) The commissioner's decision to grant, deny, or revoke a waiver is not subject to the hearings and appeals provisions as provided in Title 33, chapter 1, part 7.

(7) The commissioner may not grant a waiver with respect to any of the following:

(a) any law, rule, or other provision that is not subject to the commissioner's jurisdiction;

(b) any law, rule, or other provision concerning the assets, deposits, investments, capital surplus, or other solvency requirements applicable to insurers;

(c) the required participation in any assigned risk plan, residual market, or guaranty fund;

(d) the provisions of Title 33 related to insurers other than property or casualty insurers;

(e) any law or rule required to maintain accreditation by the national association of insurance commissioners unless the law or rule permits variances or waivers and the effect of the waiver does not eliminate accreditation;

(f) the application of any taxes or fees; and

(g) any other law or rule considered ineligible by the commissioner.

(8) A person who receives a waiver under this section may be required to possess or obtain one or a combination of the following in an amount subject to the conditions and for the purposes as the commissioner determines necessary for the protection of consumers:

(a) a contractual liability insurance policy;

(b) a surety bond issued by an authorized surety;

(c) securities of the type eligible for deposit by authorized insurers in this state;

(d) evidence that the insurer has established an account payable to the commissioner in a federally insured financial institution in this state and has deposited money of the United States in an amount equal to the amount required by this subsection (8) that is not available for withdrawal except by direct order of the commissioner;

(e) a letter of credit issued by a qualified United States financial institution; or

(f) another form of security authorized by the commissioner.

(9) (a) If a waiver is granted pursuant to this section, the commissioner shall provide public notice of the existence of the waiver by providing the following information:

(i) the specific statute or rule to which the waiver applies;

(ii) the name of the insurer who applied for and received the waiver;

(iii) the duration and other terms, conditions, or limitations of the waiver; and

(iv) any additional information considered appropriate by the commissioner.

(b) The notice requirement of this subsection (9) may be satisfied by publication on the commissioner's website.

(10) (a) The commissioner may revoke a waiver if the insurer who obtains the waiver fails to comply with any terms, conditions, or limitations established by the commissioner or the requirements of this section or if the waiver is causing a consumer harm or causes material harm to the insurer's solvency.

(b) In addition to any other sanctions and penalties permitted by the law, the commissioner may impose a fine of not more than $1,000 on any insurer who obtains a waiver and fails to comply with the material terms, conditions, or limitations established by the commissioner or the requirements of this section.

(11) The commissioner, by rule, may adopt procedures for submissions and granting, denying, monitoring, and revoking petitions for a waiver pursuant to this section. The procedures must set forth requirements for the ongoing monitoring, examination, and supervision of and reporting by each insurer granted a waiver under this section and must permit the commissioner to attach reasonable conditions or limitations on the conduct permitted pursuant to a waiver. The procedures must provide for an expedited application process for a product or service that is substantially similar to one for which a waiver has previously been granted by the commissioner.

(12) On expiration of an innovation waiver, the insurer who obtained the waiver shall cease all activities that were permitted only as a result of the waiver and comply with all applicable laws and rules.

(13) The ability to grant a waiver under this section may not be interpreted to limit or otherwise affect the authority of the commissioner to exercise discretion to waive or enforce requirements as permitted under any other section of this title or any rules.

(14) A waiver may not be granted that extends beyond July 30, 2029. (Terminates July 30, 2029--sec. 5, Ch. 546, L. 2023.)