Matt Bevin, Governor of the US state of Kentucky, has signed into legislation a new law that, it is hoped, will boost the state’s position as a hub of innovation for insurtech.
Public officials worked with law firm Frost Brown Todd’s Insurance Industry Group to develop House Bill 386, which was first introduced in the House in February, and officially signed into law at the end of March. It represents the state’s first fully comprehensive framework for an insurance regulatory sandbox, in which companies – whether or not they possess an insurance license –test new products, services and systems in a tailored regulatory ecosystem. It is hoped that the framework will find an equilibrium between the flexibility offered by private sector research and investment and the oversight that the public sector can provide. While the ‘traditional’ insurance industry will be welcomed, it is also hoped that venture capital figures and insurtech startups will be attracted and bring their new propositions to workshop.
“I’m working to send a clear message to the insurance industry that Kentucky is open for business,” said Bart Rowland, House Banking & Insurance Chairman, “and we’re focused on thinking outside the box. 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.”
Last year saw the state of Arizona sign into law a similar regulatory sandbox for fintech companies, inviting them to test new products and services with no need to obtain a license.