HB 4457

relating to innovation waivers for certain insurance laws,
regulations, and requirements; authorizing a fee; creating an
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subtitle B, Title 2, Insurance Code, is amended
by adding Chapter 87 to read as follows:
CHAPTER 87.  REGULATORY SANDBOX AND INNOVATION WAIVERS
Sec. 87.001.  AUTHORITY TO GRANT WAIVERS.  (a)  The
commissioner may grant a waiver, including a variance, with respect
to any specific insurance law, regulation, or requirement if a
person subject to that law, regulation, or requirement demonstrates
to the commissioner's satisfaction that:
(1)  application of the law, regulation, or requirement
would prohibit the introduction of an innovative or more efficient
insurance technology product or service, including an insurance
technology product or service that may enhance outcomes related to
pricing, coverage, or consumer experience, that the applicant
intends to offer during the period for which the proposed waiver is
(2)  the public policy goals of the law, regulation, or
requirement will be or have been achieved by other means;
(3)  the waiver will not substantially or unreasonably
increase any risk to consumers; and
(4)  the waiver is in the public interest.
(b)  The commissioner may not grant a waiver under this
(1)  any law, regulation, or requirement that is not
subject to the commissioner's jurisdiction;
(2)  any law, regulation, or requirement concerning the
assets, deposits, investments, capital, surplus, or other solvency
requirements applicable to insurers;
(3)  the required participation in any assigned risk
plan, residual market, or guaranty fund;
(4)  any applicable provisions of this code related to
insurer authorization requirements or insurance trade practices;
(5)  any law, regulation, or requirement required for
the department to maintain its accreditation by the National
Association of Insurance Commissioners unless the law, regulation,
or requirement permits variances or waivers;
(6)  the application of any taxes or fees; or
(7)  any other law, regulation, or requirement
determined ineligible by the commissioner.
(c)  The authority granted to the commissioner under this
section may not be construed to:
(1)  allow the commissioner to grant or extend a waiver
that would abridge the recovery rights of consumers; or
(2)  limit or otherwise affect the authority of the
commissioner to exercise discretion to waive or enforce
requirements as permitted under any other law.
Sec. 87.002.  APPLICATION FOR WAIVER.  An application for a
waiver described by Section 87.001 must be in the form and manner
prescribed by the commissioner and include:
(1)  the identity of the person applying for the
(2)  the identity of the directors and executive
officers of the applicant, any persons who are beneficial owners of
10 percent or more of the voting securities of the applicant, and
any individuals with authority to direct the management and
(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 under which it will be
(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 each statutory or regulatory
provision that prohibits the introduction, sale, or offering of the
(7)  a filing fee in an amount determined by the
(8)  any additional information required by the
Sec. 87.003.  PUBLIC NOTICE.  (a)  Not later than the 30th
day before the date the commissioner grants a waiver under this
chapter, the commissioner shall provide public notice of the
(1)  each specific law, regulation, or requirement to
which the proposed waiver applies;
(2)  the proposed terms and limitations of the proposed
(3)  the proposed duration of the proposed waiver; and
(4)  any additional information considered appropriate
(b)  If a waiver is granted under this chapter, the
commissioner shall provide public notice of the existence of the
(1)  each specific law, regulation, or requirement to
(2)  the name of the person who applied for and received
(3)  the duration of and any other terms or limitations
(4)  any additional information considered appropriate
(c)  The commissioner may satisfy a public notice
requirement under this section by publishing the information on the
Sec. 87.004.  WAIVER LENGTH; EXTENSION.  (a)  The
commissioner may grant a waiver under this chapter for an initial
period not to exceed 12 months.
(b)  Before the end of the initial waiver period, the
commissioner may grant a one-time extension of the waiver not to
exceed an additional 12 months.
(c)  Not later than the 30th day before the end of the initial
waiver period, the person who received the waiver may apply to the
commissioner for an extension of the waiver in the form and manner
prescribed by the commissioner.  The extension application must
include the length of the extension period requested and specific
reasons why the extension is necessary.
(d)  The commissioner shall grant or deny an extension
request before the end of the initial waiver period.
Sec. 87.005.  CONTESTED CASE PROVISIONS NOT APPLICABLE.  The
commissioner's decision to grant or deny a waiver or extension
under this chapter is not subject to the contested case provisions
of Chapter 2001, Government Code.
Sec. 87.006.  WAIVER TERMS AND LIMITATIONS.  (a)  A waiver
granted under this chapter must include any terms and limitations
determined 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
use the underlying product or service.
(b)  A violation of the terms and limitations described by
Subsection (a) is considered a violation of this chapter for
purposes of enforcement under this subtitle.
(c)  A person who receives a waiver under this chapter may
not sell or provide a product or service subject to the waiver to
Sec. 87.007.  WRITTEN DISCLOSURES.  A product or service
offered under a waiver granted under this chapter must include the
following written disclosures to consumers in a clear and
(1)  the name and contact information of the person
providing the product or service;
(2)  that the product or service is authorized under 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
(3)  contact information for the department, including
the method for a consumer to file a complaint with the department
regarding the product or service; and
(4)  any additional disclosures required by the
Sec. 87.008.  FINANCIAL RESPONSIBILITY REQUIREMENTS.  A
person who receives a waiver under this chapter shall possess or
obtain one or a combination of the following forms of security in an
amount and subject to conditions and purposes determined by the
commissioner to be 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 person has established an
account payable to the commissioner in a federally insured
financial institution in this state and has deposited United States
currency in an amount equal to the amount required by the
commissioner that is not available for withdrawal except by direct
(5)  a letter of credit issued by a qualified United
States financial institution; or
(6)  another form of security authorized by the
Sec. 87.009.  REVOCATION OF WAIVER; ADMINISTRATIVE PENALTY.
(a)  The commissioner may revoke a waiver if:
(1)  the person who obtains the waiver fails to comply
with this chapter, a rule adopted under this chapter, or any terms
or limitations for the waiver prescribed by the commissioner; or
(2)  the waiver is causing consumer harm.
(b)  A person who obtains a waiver and fails to comply with
this chapter, a rule adopted under this chapter, or any terms or
limitations for the waiver prescribed by the commissioner is
subject to an administrative penalty imposed under Chapter 84 of
Sec. 87.010.  ADOPTION OF RULES.  (a)  The commissioner by
rule shall adopt procedures for the submission, granting, denying,
monitoring, and revocation of a waiver under this chapter.
(1)  provide requirements for the ongoing monitoring,
examination, and supervision of, and quarterly reporting by, each
person granted a waiver under this chapter;
(2)  permit the commissioner to impose reasonable terms
or limitations on the conduct permitted under a waiver;
(3)  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; and
(4)  include an opportunity for public comment on
proposed waivers under consideration by the commissioner.
Sec. 87.011.  EFFECT OF WAIVER EXPIRATION OR REVOCATION.  On
the expiration or revocation of a waiver granted under this
chapter, the person who received the waiver shall cease all
activities that were permitted only as a result of the waiver and
comply with all applicable laws.
Sec. 87.012.  REPORT.  Not later than January 1 of each year,
the commissioner shall submit a report to the governor, lieutenant
governor, speaker of the house of representatives, and chairs of
the house and senate standing committees with primary jurisdiction
(1)  the total number of applications for waivers under
this chapter that have been received, granted, and denied by the
(2)  the information specified by Section 87.003(b) for
(3)  a list of any regulations or requirements that
have been adopted or amended as a result of or in connection with a
waiver granted under this chapter;
(4)  with respect to each law to which a waiver applies,
the commissioner's recommendation as to whether that law should be
continued, repealed, or amended to promote innovation and establish
a uniform regulatory system for all regulated entities; and
(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
Sec. 87.013.  RECIPROCITY.  The commissioner may enter into
agreements with other states that have enacted laws that are
substantially similar to this chapter to:
(1)  advance the purposes of this chapter; and
(2)  facilitate the consideration of applications for
waivers under this chapter from persons who have:
(A)  satisfied the requirements of this chapter;
(B)  received similar waivers in other states.
SECTION 2.  As soon as practicable after the effective date
of this Act, the commissioner of insurance shall adopt rules
necessary to implement this Act.
SECTION 3.  This Act takes effect September 1, 2025.