The commissioner can grant applicants an innovation waiver, allowing them to introduce an innovative insurance product or service without the typically required license or without being fully compliant with an insurance law or regulation. (Credit: Mojo_cp/Adobe Stock)
The Louisiana Department of Insurance (LDI) announced its intent to promulgate Regulation 134, creating the Insurance Regulatory Sandbox Program. Regulation 134 was enacted through the passage of Act 229 of the 2024 Regular Session of the Louisiana Legislature.
The program gives the insurance commissioner the authority to grant temporary waivers from certain insurance laws and regulations to businesses in order to test innovative insurance products and services. Regulation 134 outlines the standards and procedures for participating in the program.
The commissioner can grant applicants an innovation waiver, allowing them to introduce an innovative insurance product or service without the typically required license or without being fully compliant with an insurance law or regulation. The applicant should demonstrate that the innovation waiver will not unreasonably increase risk to consumers or create unfair competition in the market, and that the innovation waiver is in the public interest.
Some conditions apply to the innovation waiver. First, the product or service offered can be sold to no more than 10,000 consumers. The commissioner can also limit the amount of premium that can be collected for the product, place liability coverage and minimum financial reserve requirements that the applicant must meet during testing, and require regular or additional reporting of the product or service.
Applicants must apply in writing to the commissioner through the Office of Policy, Innovation, and Research. The commissioner will grant or deny a waiver within 90 days. If approved, the waiver is granted for an initial period of up to three years. A one-time extension can be granted for an additional three years. If a waiver expires, the applicant must cease any activity that was only permitted as a result of the waiver.
Regulation 134 can be found here.
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