Legislation to enable insurtech experimentation and innovation in Vermont is on its way to the Governor’s desk for his signature. In the next week or so, Governor Phil Scott is expected to sign the insurance and securities bill (S-131). Among other things, this bill creates an insurtech “sandbox” which will allow more R&D in this area with specific guidelines. It also updates Vermont’s surplus lines laws.
The regulatory sandbox in S-131 will provide the flexibility necessary to accommodate new concepts at the same speed as insurance technology develops. It does so by lowering or eliminating the hurdles facing this sector in bringing developments to market amid an insurance regulatory landscape that does not always accommodate such development. Not everyone will be able to play in the sandbox environment, as eligibility criteria limits the number of clients and a limited time period for the developers is part of the package. Overall, though, it’s a great step forward.
Earlier this year, Commissioner of Financial Regulation Mike Pieciak and Secretary of State Jim Condos signed a memorandum of understanding outlining their collaborative efforts to explore emerging blockchain technology and its use in the digital recordkeeping practices of the captive insurance industry. They jointly issued a Request for Information (RFI) to identify vendors that may work with the State to launch a pilot program allowing new captive insurance companies to register with the Secretary of State using blockchain technology. The pilot program will help the state identify areas where the use of blockchain technology in regulatory and other government business may increase data security and reduce costs for residents and those doing business in Vermont. There were more than 20 submissions which the department is currently reviewing.
The support of the insurtech sector and the blockchain pilot program are great examples of Vermont’s openness to technology trials and innovations in our State, and Vermont’s awareness that the insurance industry as a whole is ripe for innovation.
Thank you all very much, and I look forward to hearing from you!