Vermont law permits regulators to issue innovation waivers

Vermont Gov. Phil Scott signed a bill to create an insurance regulatory sandbox that permits state regulators to grant limited-duration innovation waivers.

S. 131 permits the Commissioner of Financial Regulation to issue the waivers, which waive certain statutory and regulatory requirements for a specific time period, according to a statement by the governor’s office on Tuesday.

Innovation waivers may be granted if a company demonstrates a waiver is in the public interest and will not substantially increase risk to consumers.

“Although companies may be granted temporary relief from certain statutory or regulatory requirements under this program, they will also be subject to enhanced regulatory oversight during the waiver period,” Commissioner Michael Pieciak said in the statement.

At the end of a waiver period, a company must cease offering the product or service and comply with all applicable laws and regulations, according to a statement.

“If a product completes a successful test under a waiver, the Department could determine that statutory change is warranted and propose appropriate legislation to allow the insurance product or service to be offered on a permanent basis,” Deputy Commissioner of Insurance Kevin Gaffney said in the statement. 

The department anticipates it will begin accepting applications for innovation waivers by the end of 2019 once regulations are adopted.