La. Stat. tit. 22 § 1430.2

Current with changes from the 2024 legislative session, Chs. 3, 6-495, effective on or before 7/1/2024

Section 22:1430.2 - Regulatory sandbox and innovation waivers; application requirements; fees; disclosures; prohibitions; rules; extensions

A. The commissioner may grant a variance or waiver with respect to the specific requirements of any insurance law, regulation, directive, or bulletin if a person subject to that law, regulation, directive, or bulletin demonstrates all of the following to the commissioner's satisfaction:

(1) The application of the law, regulation, directive, 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.

(2) The public policy goals of the law, regulation, directive, or bulletin will be or have been achieved by other means.

(3) The waiver will not substantially or unreasonably increase any risk to consumers.

(4) The waiver is in the public interest.

B. A person shall include in an application for innovation waiver all of the following:

(1) The identity of the person applying for the waiver.

(2) The identity of the directors and executive officers of the applicant, any persons who are beneficial owners of ten percent or more of the voting securities of the applicant, and any individuals with power to direct the management and policies of the applicant.

(3) 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 will be offered.

(4) A description of the potential benefits to consumers of the product or service.

(5) A description of the potential risks to consumers posed by the product or service or the approval of the proposed waiver and how the applicant proposes to mitigate such risks.

(6) An identification of the statutory or regulatory provision that prohibits the introduction, sale, or offering of the product or service.

(7) A filing fee in an amount determined by the commissioner.

(8) Any additional information required by the commissioner.

(1) If approved by the commissioner, an innovation waiver shall be granted for an initial period of up to three years.

(2) Prior to the end of the initial waiver period, the commissioner may grant a one-time extension for up to an additional three years. If a person requests to extend a waiver, the person shall make an extension request to the commissioner at least thirty days prior to the end of the initial waiver period, and shall 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.

D. The commissioner shall include in an innovation waiver any terms, conditions, and limitations deemed 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 in no event shall a product or service subject to an innovation waiver be purchased or utilized by more than ten thousand consumers.

E. A person offering a product or service pursuant to an innovation waiver shall clearly and conspicuously disclose to consumers all of the following:

(1) The name and contact information of the person providing the product or service.

(2) 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 shall be specified.

(3) Contact information for the department, including how a consumer may file a complaint with the department regarding the product or service.

(4) Any additional disclosures required by the commissioner.

F. The commissioner's decision to grant or deny a waiver or extension is not subject to the contested-case provisions of the Administrative Procedure Act.

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

(a) Any law, regulation, directive, bulletin, or other provision that is not subject to the commissioner's jurisdiction pursuant to this Title.

(b) Any law, regulation, directive, bulletin, 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) Requirements with respect to insurance licensing, insurance trade practices, or particular lines of insurance or insurance products.

(e) Any law, regulation, or bulletin required for the department to maintain its accreditation by the National Association of Insurance Commissioners unless the law or regulation permits variances or waivers.

(f) The application of any taxes or fees.

(g) Any other law, regulation, directive, or bulletin deemed ineligible by the commissioner.

(2) The commissioner shall not grant or extend a waiver that would abridge the recovery rights of consumers.

H. A person who receives a waiver pursuant to this Section shall possess or obtain one or a combination of the following in an amount subject to conditions and purposes the commissioner determines necessary for the protection of consumers:

(1) A contractual liability insurance policy.

(2) A surety bond issued by an authorized surety.

(3) Securities of the type eligible for deposit by authorized insurers in this state.

(4) Evidence that the applicant 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 an amount required by the commissioner that is not available for withdrawal except by direct order of the commissioner.

(5) A letter of credit issued by a qualified financial institution as defined in R.S. 22:512.

(6) Another form of security authorized by the commissioner

(1) At least thirty days prior to granting an innovation waiver, the commissioner shall provide public notice of the draft waiver by publishing all of the following information:

(a) The specific statute, regulation, directive, or bulletin to which the draft waiver applies.

(b) The proposed terms, conditions, and limitations of the draft waiver.

(c) The proposed duration of the draft waiver.

(d) Any additional information deemed appropriate by the commissioner.

(2) The commissioner may satisfy the notice requirement of this Subsection by publication on the department's website.

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

(a) The specific statute, regulation, directive, or bulletin to which the waiver applies.

(b) The name of the person who applied for and received the waiver.

(c) The duration of and any other terms, conditions, or limitations of the waiver.

(d) Any additional information deemed appropriate by the commissioner.

(2) The commissioner may satisfy the notice requirement of this Subsection by publication on the department's website.

(1) The commissioner may revoke a waiver if the person 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 consumer harm.

(2) In addition to any other penalties permitted by law, the commissioner may impose a fine of not more than one thousand dollars on any person who obtains a waiver who fails to comply with any terms, conditions, or limitations established by the commissioner or the requirements of this Section.

(1) In accordance with the Administrative Procedure Act, the commissioner shall adopt rules and procedures for the submission, granting, denying, monitoring, and revocation of petitions for a waiver pursuant to this Section. The commissioner shall set forth in the procedures all of the following:

(a) The requirements for the ongoing monitoring, examination, supervision of, and reporting by, each person granted a waiver pursuant to this Section.

(b) 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.

(c) Procedure that provides an opportunity for public comment on draft waivers under consideration by the commissioner.

(2) The commissioner may attach reasonable conditions or limitations on the conduct permitted pursuant to a waiver.

(3) The commissioner may adopt any other rules necessary to effectuate the purposes of this Subpart.

M. Upon expiration of an innovation waiver, the person who obtained the waiver shall cease all activities that were only permitted as a result of the waiver and comply with all generally applicable laws and regulations.

N. The commissioner's authority to grant a waiver pursuant to this Section does not limit or otherwise affect his authority to exercise discretion to waive or enforce any provision of this Title or applicable administrative regulations.

O. On or before January first of each calendar year, the commissioner shall submit a report for the previous calendar year to the Senate Committee on Insurance and the House Committee on Insurance providing all of the following information:

(1) The total number of applications for waivers that have been received, granted, and denied by the commissioner.

(2) For each waiver granted by the commissioner, the information specified pursuant to Paragraph (J)(1) of this Section.

(3) A list of any regulations, directives, or bulletins that have been adopted or amended as a result of or in connection with a waiver granted pursuant to this Section.

(4) With respect to each statute to which a waiver applies, 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 system for all regulated entities.

(5) A list of any waivers that have lapsed or been revoked and, if revoked, a description of other regulatory or disciplinary actions, if any, that resulted in, accompanied, or resulted from such revocation.

P. The commissioner shall not grant new waivers or extensions after June 30, 2029.

La. R.S. § 22:1430.2

Added by Acts 2024, No. 229,s. 1, eff. 5/23/2024.