SB1723sam002 100TH GENERAL ASSEMBLY

Sen. Antonio Muņoz

Filed: 3/15/2017

10000SB1723sam002 LRB100 09238 SMS 23587 a

AMENDMENT TO SENATE BILL 1723

AMENDMENT NO. ______. Amend Senate Bill 1723 by replacing everything after the enacting clause with the following:

"Section 1. Short title. This Act may be cited as the Insurance Industry Innovation Act.

Section 5. Definitions. In this Act:

"Covered person" includes an individual, company, association, organization, partnership, business trust, corporation, and every form of legal entity that offers or intends to offer an insurance innovation by submitting a petition to the Department of Insurance.

"Department" means the Department of Insurance.

"Deputy Director" means the Deputy Director of the Innovation Division of the Department of Insurance.

"Director" means the Director of Insurance.

"Enforceable compliance agreement" means a contractual agreement described in subsection (a) of Section 25.

"Insurance innovation" means an innovative service or product that is or may be subject to regulation by the Department of Insurance.

"Innovation Division" means the Innovation Division in the Department of Insurance.

Section 10. Innovation Division.

(a) Subject to appropriation, the Department shall establish an Innovation Division to promote insurance product innovations and to assist a covered person whose petition has been approved under Section 20.

(b) The Director shall appoint an individual to serve as the Deputy Director of the Innovation Division.

(c) The duties of the Deputy Director shall include:

(1) supporting the Department in the development of insurance innovations; and

(2) establishing procedures to reduce the time and cost of offering an insurance innovation to the public and enable greater access to insurance innovations.

(d) With respect to a covered person whose petition has been approved under Section 20, the Insurance Division shall:

(1) work with the covered person to address issues of how existing regulatory frameworks apply to the insurance innovation that is the subject of the petition; and

(2) assist the covered person in complying with the requirements of State statutes and rules adopted by the Department that apply to the insurance innovation.

Section 15. Petition to the Department.

(a) A covered person may submit a petition to the Department, through the Innovation Division, in such form and in such manner as the Innovation Division may require, to request to enter into an enforceable compliance agreement pursuant to Section 25 with the Department with respect to an insurance innovation the covered person offers or intends to offer.

(b) A petition submitted under this Section, shall demonstrate that the insurance innovation:

(1) would serve the public interest;

(2) improves access to insurance products or services; and

(3) does not present systemic risk to the State and promotes consumer protection.

(c) One or more covered persons that offers or intends to offer similar insurance innovations may jointly submit a petition under this Section.

(d) The Department shall maintain the confidentiality of any nonpublicly available data or information in any petition submitted under this Section. The Department shall give reasonable consideration to maintaining the confidentiality of data or information identified by the covered person in the petition submitting under this Section as nonpublicly available data or information.

Section 20. Department determination of petition.

(a) No later than 60 days after receipt of a petition under Section 15, the Director shall complete a review of the petition and notify the covered person, in writing, of the Department's determination of the petition.

(b) If the covered person submitting the petition meets the requirements of Section 15, the Department shall:

(1) approve the petition; and

(2) enter into an enforceable compliance agreement with the covered person in accordance with the requirements of Section 25.

(c) If the Department rejects a petition, the Director shall provide the covered person with a written notice explaining the reason for rejecting the petition, including:

(1) an identification of the rules of the Department or State statutes applicable to the covered person with respect to the insurance innovation; and

(2) a description of:

(A) any beneficial effects, including an identification of persons likely to benefit, from rejecting the petition;

(B) any potential costs, including an identification of persons likely to bear the costs, of rejecting the petition; and

(C) the baseline used by the Department to measure the likely economic consequences of rejecting the petition.

(d) No later than 90 days after receiving a notice of disapproval, a covered person may revise and resubmit a petition to the agency under Section 15.

Section 25. Enforceable compliance agreement.

(a) If the Department approves a petition under Section 20, the covered person may enter into an enforceable compliance agreement with the Department, which shall include the terms under which the covered person may develop or offer the approved insurance innovation to the public and any requirements of the covered person and the Department with respect to the insurance innovation.

(b) The Department, by rule, may establish requirements relating to enforceable compliance agreements that include, but are not limited to:

(1) procedures for modifying the terms of the agreement;

(2) consequences for failure to comply with the terms of the agreement;

(3) a compliance examination process that solicits feedback from other agencies on the agreement and occurs not less frequently than annually;

(4) a termination date for the agreement;

(5) procedures for extending the termination date;

(6) procedures for judicial review; and

(7) procedures for maintaining the confidentiality of any information disclosed to the Department in making the agreement.

(c) This Act is controlling to the extent of any conflict of statutory provisions of laws now in force or hereafter enacted.

Section 30. Report to the General Assembly. No later than one year after the effective date of this Act, and annually thereafter, the Department shall submit to the General Assembly a report on the aggregate impact of enforceable compliance agreements entered into under this Act, which shall include:

(1) the number and characteristics of the agreements;

(2) the most innovative and least burdensome tools that the Innovation Division has implemented for achieving regulatory ends;

(3) the existing State laws, rules, or practices that the Department identifies as the most burdensome to innovation in developing or providing insurance products and services, that adversely affect competition in the insurance industry, or that restrict improvements for consumers of insurance products or services; and

(4) an identification of the overlap or fragmentation of regulation of insurance products or services and recommendations for reducing, consolidating, or eliminating such overlap or fragmentation.

Section 35. Funding. The Department, by rule, may establish the cost of each application for petition.

Section 99. Effective date. This Act takes effect January 1, 2018.".