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A BILL TO BE ENTITLED
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AN ACT
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relating to innovation waivers for certain insurance laws, |
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regulations, and requirements; authorizing a fee. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle B, Title 2, Insurance Code, is amended |
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by adding Chapter 87 to read as follows: |
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CHAPTER 87. REGULATORY SANDBOX AND INNOVATION WAIVERS |
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Sec. 87.001. AUTHORITY TO GRANT WAIVERS. (a) The |
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commissioner may grant a waiver, including a variance, with respect |
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to any specific insurance law, regulation, or requirement if a |
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person subject to that law, regulation, or requirement demonstrates |
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to the commissioner's satisfaction that: |
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(1) application of the law, regulation, or requirement |
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would prohibit the introduction of an innovative or more efficient |
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insurance product or service that the applicant intends to offer |
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during the period for which the proposed waiver is granted; |
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(2) the public policy goals of the law, regulation, or |
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requirement will be or have been achieved by other means; |
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(3) the waiver will not substantially or unreasonably |
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increase any risk to consumers; and |
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(4) the waiver is in the public interest. |
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(b) The commissioner may not grant a waiver under this |
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chapter with respect to: |
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(1) any law, regulation, or requirement that is not |
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subject to the commissioner's jurisdiction; |
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(2) any law, regulation, or requirement concerning the |
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assets, deposits, investments, capital, surplus, or other solvency |
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requirements applicable to insurers; |
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(3) the required participation in any assigned risk |
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plan, residual market, or guaranty fund; |
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(4) any applicable provisions of this code related to |
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insurer authorization requirements or insurance trade practices; |
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(5) any law, regulation, or requirement required for |
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the department to maintain its accreditation by the National |
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Association of Insurance Commissioners unless the law or regulation |
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permits variances or waivers; |
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(6) the application of any taxes or fees; or |
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(7) any other law, regulation, or requirement |
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determined ineligible by the commissioner. |
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(c) The authority granted to the commissioner under this |
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section may not be construed to: |
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(1) allow the commissioner to grant or extend a waiver |
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that would abridge the recovery rights of consumers; or |
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(2) limit or otherwise affect the authority of the |
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commissioner to exercise discretion to waive or enforce |
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requirements as permitted under any other law. |
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Sec. 87.002. APPLICATION FOR WAIVER. An application for a |
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waiver described by Section 87.001 must be in the form and manner |
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prescribed by the commissioner and include: |
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(1) the identity of the person applying for the |
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waiver; |
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(2) the identity of the directors and executive |
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officers of the applicant, any persons who are beneficial owners of |
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10 percent or more of the voting securities of the applicant, and |
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any individuals with authority to direct the management and |
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policies of the applicant; |
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(3) a description of the product or service to be |
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offered if the waiver is granted, including how the product or |
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service functions and the manner and terms under which it will be |
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offered; |
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(4) a description of the potential benefits to |
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consumers of the product or service; |
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(5) a description of the potential risks to consumers |
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posed by the product or service or the approval of the proposed |
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waiver and how the applicant proposes to mitigate such risks; |
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(6) an identification of each statutory or regulatory |
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provision that prohibits the introduction, sale, or offering of the |
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product or service; |
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(7) a filing fee in an amount determined by the |
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commissioner; and |
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(8) any additional information required by the |
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commissioner. |
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Sec. 87.003. PUBLIC NOTICE. (a) Not later than the 30th |
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day before the date the commissioner grants a waiver under this |
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chapter, the commissioner shall provide public notice of the |
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proposed waiver by publishing: |
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(1) each specific law, regulation, or requirement to |
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which the proposed waiver applies; |
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(2) the proposed terms and limitations of the proposed |
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waiver; |
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(3) the proposed duration of the proposed waiver; and |
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(4) any additional information considered appropriate |
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by the commissioner. |
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(b) If a waiver is granted under this chapter, the |
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commissioner shall provide public notice of the existence of the |
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waiver by providing: |
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(1) each specific law, regulation, or requirement to |
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which the waiver applies; |
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(2) the name of the person who applied for and received |
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the waiver; |
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(3) the duration of and any other terms or limitations |
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of the waiver; and |
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(4) any additional information considered appropriate |
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by the commissioner. |
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(c) The commissioner may satisfy a public notice |
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requirement under this section by publishing the information on the |
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department's Internet website. |
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Sec. 87.004. WAIVER LENGTH; EXTENSION. (a) The |
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commissioner may grant a waiver under this chapter for an initial |
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period not to exceed 12 months. |
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(b) Before the end of the initial waiver period, the |
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commissioner may grant a one-time extension of the waiver not to |
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exceed an additional 12 months. |
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(c) Not later than the 30th day before the end of the initial |
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waiver period, the person who received the waiver may apply to the |
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commissioner for an extension of the waiver in the form and manner |
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prescribed by the commissioner. The extension application must |
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include the length of the extension period requested and specific |
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reasons why the extension is necessary. |
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(d) The commissioner shall grant or deny an extension |
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request before the end of the initial waiver period. |
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Sec. 87.005. CONTESTED CASE PROVISIONS NOT APPLICABLE. The |
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commissioner's decision to grant or deny a waiver or extension |
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under this chapter is not subject to the contested case provisions |
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of Chapter 2001, Government Code. |
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Sec. 87.006. WAIVER TERMS AND LIMITATIONS. (a) A waiver |
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granted under this chapter must include any terms and limitations |
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determined appropriate by the commissioner, including limits on the |
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amount of premium that may be written in relation to the underlying |
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product or service and the number of consumers that may purchase or |
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use the underlying product or service. |
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(b) A violation of the terms and limitations described by |
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Subsection (a) is considered a violation of this chapter for |
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purposes of enforcement under this subtitle. |
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(c) A person who receives a waiver under this chapter may |
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not sell or provide a product or service subject to the waiver to |
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more than 10,000 consumers. |
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Sec. 87.007. WRITTEN DISCLOSURE. A product or service |
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offered under a waiver granted under this chapter must include the |
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following written disclosures to consumers in a clear and |
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conspicuous form: |
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(1) the name and contact information of the person |
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providing the product or service; |
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(2) that the product or service is authorized under an |
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innovation waiver for a temporary period of time and may be |
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discontinued at the end of the waiver period, the date of which must |
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be specified; |
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(3) contact information for the department, including |
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the method for a consumer to file a complaint with the department |
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regarding the product or service; and |
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(4) any additional disclosures required by the |
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commissioner. |
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Sec. 87.008. FINANCIAL RESPONSIBILITY REQUIREMENTS. A |
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person who receives a waiver under this chapter shall possess or |
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obtain one or a combination of the following forms of security in an |
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amount and subject to conditions and purposes determined by the |
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commissioner to be necessary for the protection of consumers: |
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(1) a contractual liability insurance policy; |
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(2) a surety bond issued by an authorized surety; |
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(3) securities of the type eligible for deposit by |
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authorized insurers in this state; |
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(4) evidence that the person has established an |
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account payable to the commissioner in a federally insured |
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financial institution in this state and has deposited United States |
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currency in an amount equal to the amount required by the |
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commissioner that is not available for withdrawal except by direct |
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order of the commissioner; |
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(5) a letter of credit issued by a qualified United |
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States financial institution; or |
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(6) another form of security authorized by the |
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commissioner. |
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Sec. 87.009. REVOCATION OF WAIVER. The commissioner may |
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revoke a waiver if: |
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(1) the person who obtains the waiver fails to comply |
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with this chapter, a rule adopted under this chapter, or any terms |
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or limitations for the waiver established by the commissioner; or |
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(2) the waiver is causing consumer harm. |
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Sec. 87.010. ADOPTION OF RULES. (a) The commissioner by |
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rule shall adopt procedures for the submission, granting, denying, |
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monitoring, and revocation of a waiver under this chapter. |
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(b) The rules must: |
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(1) provide requirements for the ongoing monitoring, |
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examination, and supervision of, and reporting by, each person |
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granted a waiver under this chapter; |
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(2) permit the commissioner to impose reasonable terms |
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or limitations on the conduct permitted under a waiver; |
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(3) provide for an expedited application process for a |
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product or service that is substantially similar to one for which a |
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waiver has previously been granted by the commissioner; and |
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(4) include an opportunity for public comment on |
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proposed waivers under consideration by the commissioner. |
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Sec. 87.011. EFFECT OF WAIVER EXPIRATION OR REVOCATION. On |
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the expiration or revocation of a waiver granted under this |
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chapter, the person who received the waiver shall cease all |
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activities that were permitted only as a result of the waiver and |
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comply with all applicable laws. |
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Sec. 87.012. REPORT. Not later than January 1 of each year, |
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the commissioner shall submit a report to the governor, lieutenant |
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governor, speaker of the house of representatives, and chairs of |
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the house and senate standing committees with primary jurisdiction |
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over the department providing: |
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(1) the total number of applications for waivers under |
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this chapter that have been received, granted, and denied by the |
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commissioner; |
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(2) the information specified by Section 87.003(b) for |
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each waiver granted; |
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(3) a list of any regulations or requirements that |
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have been adopted or amended as a result of or in connection with a |
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waiver granted under this chapter; |
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(4) with respect to each law to which a waiver applies, |
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the commissioner's recommendation as to whether that law should be |
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continued, repealed, or amended to promote innovation and establish |
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a uniform regulatory system for all regulated entities; and |
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(5) a list of any waivers that have lapsed or been |
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revoked, and, if revoked, a description of other regulatory or |
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disciplinary actions, if any, that resulted in, accompanied, or |
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resulted from that revocation. |
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Sec. 87.013. RECIPROCITY. The commissioner may enter into |
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agreements with other states that have enacted laws that are |
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substantially similar to this chapter to: |
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(1) advance the purposes of this chapter; and |
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(2) facilitate the consideration of applications for |
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waivers under this chapter from persons who have: |
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(A) satisfied the requirements of this chapter; |
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and |
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(B) received similar waivers in other states. |
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SECTION 2. As soon as practicable after the effective date |
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of this Act, the commissioner of insurance shall adopt rules |
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necessary to implement this Act. |
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SECTION 3. This Act takes effect September 1, 2023. |