New Law Puts Kentucky on Cutting Edge of Insurance Innovation
Kentucky Governor Matt Bevin signed new legislation into law that will make the Commonwealth a true innovation hub for companies in the insurance and technology industries (InsurTech). Rep. Bart Rowland (R-Tompkinsville) worked closely with Frost Brown Todd (FBT)’s Insurance Industry Group, officials at the Kentucky Department of Insurance and the Public Protection Cabinet, and FBT public affairs subsidiary CivicPoint to develop and pass House Bill 386. The legislation is the first comprehensive framework for an insurance regulatory “sandbox” in the nation. It allows companies, even those without an insurance license, to come to the Bluegrass and beta test their inventions in a tailored regulatory environment.
“I’m working to send a clear message to the insurance industry that Kentucky is open for business and we’re focused on thinking outside the box,” said House Banking & Insurance Chairman Bart Rowland. “We’re working to transform our state and we want you to come here if you’re looking to invest in innovative insurance products, processes or technologies.”
The proposed regulatory sandbox – crafted by industry professionals and government regulators – works to strike a balance between private-sector flexibility and innovation while providing necessary and balanced public-sector oversight. The sandbox is intended to attract interest not only from the existing insurance industry but also from venture capitalists and tech startups wanting to innovate insurance in a regulatory sandbox which will permit beta testing in a controlled environment followed by a temporary regulatory safe harbor if the innovation’s utility is adequate.
“This insurance sandbox, or safe place for innovation, could include anything from a digital commerce platform, a new product, or back end portal for simplifying a purchase path,” said FBT Insurance Industry Group Chair Greg Mitchell. “The law builds on existing regulations in the United Kingdom and other states putting the Bluegrass State as a leader in the InsurTech world.”
The legislation enjoyed broad bipartisan support due to its balanced approach. Out of 138 members in the Kentucky General Assembly, only three members voted against the measure. FBT’s insurance and technology expertise, together with CivicPoint’s connectivity in the state legislature helped pass HB 386 on its first try through the process.