SB453 (2020) Detail

Establishing an insurance regulatory sandbox program to temporarily test insurance technology products and services.










AN ACT establishing an insurance regulatory sandbox program to temporarily test insurance technology products and services.


SPONSORS: Sen. French, Dist 7; Sen. Morgan, Dist 23; Rep. Hunt, Ches. 11; Rep. Bartlett, Merr. 19








This bill establishes an insurance regulatory sandbox program to temporarily test insurance technology products and services.


This bill is a request of the insurance department.


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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.






In the Year of Our Lord Two Thousand Twenty


AN ACT establishing an insurance regulatory sandbox program to temporarily test insurance technology products and services.


Be it Enacted by the Senate and House of Representatives in General Court convened:


1  Statement of Purpose.  

I.  The general court finds that the insurance industry is an important economic driver in New Hampshire, and insurance technology is undergoing a transformational period.  New technologies (Insurtech) are providing greater automation, connectivity, transparency, and opportunity for insurance products and services.  The existing legal and regulatory frameworks are potentially restricting insurance innovation in New Hampshire because these frameworks were established at a time when technology was not a fundamental component of insurance products and services.  Innovators in the insurance industry require a flexible regulatory environment in which to test new products and services while preserving consumer protections.  New Hampshire is among the nation's leading states in technology, innovation, and regulatory reform.  A regulatory sandbox program will provide unique solutions and a framework to grow within the regulated insurance services sector.

II.  Therefore, the general court hereby establishes, an insurance regulatory sandbox program which will encourage further development of the Insurtech industry in New Hampshire and will provide additional solutions for residents of this state in meeting their risk management needs.

2  New Chapter; Insurance Regulatory Sandbox Program.  Amend RSA by inserting after chapter 400-B the following new chapter:



400-C:1  Definitions.  In this chapter:

I.  “Commissioner” means the insurance commissioner.

II.  “Consumer” means a person that purchases or otherwise enters into a transaction or agreement to receive an insurance technology product or service that is being tested by a sandbox participant.

III.  "Insurance regulatory sandbox" or “sandbox” means a program that allows a person to temporarily test insurance technology products or services on a limited basis and under the protection of a waiver of specified insurance laws or rules of this state.

IV.  "No-action letter" means a letter setting forth the conditions of a regulatory sandbox test and establishing a safe harbor under which the commissioner shall not take any administrative or regulatory action against a sandbox participant concerning the compliance of the insurance innovation with New Hampshire law if the participant abides by the terms and conditions established in the no-action letter.

V.  "Program" means the insurance regulatory sandbox program.

VI.  "Sandbox participant" means a person whose application to participate in the regulatory sandbox is approved pursuant to this chapter.

VII.  "Technologically innovative product or service" means an insurance product or service with the use or incorporation of new or emerging technology or the re-imagination of uses for existing technology to address a problem, provide a benefit or otherwise offer a product, service, business model or delivery mechanism that is not known by the commissioner to have a comparable widespread offering in this state.

VIII.  "Test" means to engage in activities and to provide services or products in accordance with this chapter.

400-C:2  Insurance Regulatory Sandbox Established.

I.  There is created the insurance regulatory sandbox program.  A person approved under this program as a sandbox participant may conduct a test of a product or service on consumers in accordance with this chapter, any rules adopted pursuant to this chapter, and any conditions imposed on the test by the commissioner.

II.  In administering the regulatory sandbox, the commissioner shall establish a program to enable a person to obtain limited access to the insurance market in New Hampshire to test an innovative product or service under the protection of a no-action letter whereby the sandbox participant shall be assured that no enforcement action shall be taken by the commissioner pursuant to specified insurance laws or rules under specified conditions and for a specified period of time.

400-C:3  Application Requirements.

I.  A person may apply to the commissioner for admission to the insurance regulatory sandbox by submitting an application in the form prescribed by the commissioner, which shall contain at least the following information:

(a)  An explanation of how the innovation will:

(1)  Add value for consumers and serve the public interest;

(2)  Be economically viable for the applicant;

(3)  Provide suitable consumer protection; and

(4)  Not pose an unreasonable risk of consumer harm.

(b)  A detailed description of the statutory and regulatory issues that may prevent the innovation from being currently utilized, issued, sold, solicited, distributed, or advertised in the market.

(c)  A description of how the innovation functions and the manner in which it will be offered or provided.

(d)  If the innovation involves the use of software, hardware, or other technology developed for the purpose of implementing or operating it, a summary document setting forth a description of the operation and general content of technology to be utilized, including:

(1)  The problem addressed by that technology; and

(2)  The interaction between that technology and its users.

(e)  If the innovation involves the issuance of a policy of insurance, a statement that:

(1)  If the applicant will be the insurer on the policy, that the applicant holds a valid certificate of authority and is authorized to issue the insurance coverage in question; or

(2)  If another person will be the insurer on the policy, that the other person holds a valid certificate of authority and is authorized to issue the insurance coverage in question.

(f)  A statement by an officer of the applicant certifying that no product, process, method, or procedure substantially similar to the innovation has been used, sold, licensed, or otherwise made available in New Hampshire before the effective filing date of the application.

(g)  The name and contact information of the applicant's insurance regulatory counsel, which shall be a person with experience providing insurance regulatory compliance advice.

(h)  A detailed description of the specific conduct that the applicant proposes should be permitted by the no-action letter.

(i)  Proposed terms and conditions to govern the applicant's sandbox test, which shall include:

(1)  Citation to the provisions of New Hampshire insurance law that should be the subject of the no-action letter;

(2)  Proposed metrics by which the commissioner may reasonably assess the innovation's utility during the sandbox test; and

(3)  A statement of the targeted amount of New Hampshire sales and number of New Hampshire consumers projected to be involved in the sandbox test.

(j)  All relevant personal and contact information for the applicant, including:

(1)  Persons who are directors and executive officers of the applicant;

(2)  General partners of the applicant if the applicant is a limited partnership;

(3)  Members of the applicant if the applicant is a limited liability applicant;

(4)  Persons who are beneficial owners of 10 percent or more of the voting securities of the applicant;

(5)  Other persons with direct or indirect power to direct the management and policies of the applicant by contract, other than a commercial contract for goods or non-management services; and

(6)  Conflicts of interest with respect to any person listed in this paragraph and the commissioner.

(k)  The applicant's form and place of organization, if applicable.

(l)  A certificate of good standing from the state in which the applicant was organized, if applicable.

(m)  A certificate of authority from the secretary of state to conduct business in New Hampshire or other evidence of the applicant's registration or qualification to do business in New Hampshire.

(n)  The most recent audited annual financial statement of the applicant, or if the applicant is a wholly owned subsidiary, of the applicant's parent entity.  This statement shall include the balance sheet, statement of income or loss, statement of changes in shareholder equity, if applicable, and statement of changes in financial position.

(o)  A disclosure of any criminal convictions of the applicant or other participating personnel, if any.

(p)  Evidence demonstrating that the applicant has the necessary personnel, financial and technical expertise, access to capital, and developed plan to test, monitor, and assess the innovative product or service;  

(q)  A description of the proposed testing plan, including estimated time periods for

beginning the test, ending the test, and obtaining necessary licensure or authorizations after the testing is complete.

(r)  A description of how the applicant will perform ongoing duties after the test, and

how the applicant will end the test and protect consumers if the test fails.

(s)  Any other information required by the commissioner.

II.  An applicant shall file a separate application for each innovative product or service that the applicant wishes to test.

III.  After an application is filed, the commissioner may seek additional information from the applicant that the commissioner determines is necessary.

IV.  The application fee shall be $500.

400-C:4  Process for Reviewing Applications.

I.  On receipt of a completed application and the fee, the commissioner shall investigate the following:

(a)  The applicant's financial condition and responsibility, financial and business experience, and character and general fitness.

(b)  The adequacy and feasibility of the applicant’s business plan.

(c)  The extent of risk to consumers of testing the product or service in the sandbox environment and the adequacy of the applicant's proposed plan to address those risks.

(d)  The potential benefit of the innovation to the market and to consumers.

(e)  The adequacy of the wind-down plan.

II.  The commissioner may consider an application abandoned if the following are true:  

(a)  The applicant fails to respond to a request for information by the commissioner within 30 days of the date of the request; and

(b)  The commissioner has given the applicant 15 days' written notice of the commissioner's intention to consider the application abandoned.

III.  The commissioner may issue an insurance regulatory sandbox registration to an applicant if the commissioner finds the following:

(a)  The applicant's financial condition is sound.

(b)  The applicant's business will be conducted honestly, fairly, equitably, carefully, efficiently, consistent with the purpose and intent of this chapter, and in a manner commanding the community's confidence and trust.

(c)  The applicant and the applicant's controlling persons and key management personnel are qualified and of good character.

(d)  The applicant's plan includes adequate risk management and cybersecurity measures to protect consumers.

(e)  No person on behalf of the applicant has knowingly made a material misstatement or omission in the application.

(f)  The applicant's plan to protect consumers will adequately protect consumers from the harm that is the focus of the state law or rule that is the subject of the no-action letter, and the projected benefits to consumers of applying the law or rule do not outweigh the projected benefits to consumers from increased competition, innovation, and consumer access that a limited waiver of the law or regulation, in conjunction with the applicant's ability to compensate consumers who may be harmed, would provide.

(g)  The applicant meets other similar requirements determined by the commissioner.

IV.  The commissioner may impose conditions on a sandbox participant's test.  

V.  Subject to paragraph VI, not later than 90 days after the day on which a complete application is received by the commissioner, the commissioner shall inform the applicant whether the application is approved for entry into the regulatory sandbox.

VI.  The commissioner and an applicant may mutually agree to extend the 90-day time period described in paragraph V for the commissioner to determine whether an application is approved for entry into the regulatory sandbox.

VII.  In reviewing an application under this section, the commissioner shall consider whether a competitor to the applicant is or has been a sandbox participant and, if so, weigh that as a factor in favor of allowing the applicant to also become a sandbox participant.

VIII.  If the commissioner approves admitting an applicant into the regulatory sandbox, the commissioner shall issue a notice of registration and no-action letter to the applicant.  The notice of registration and no-action letter shall set forth the terms and conditions that will govern the applicant’s test, which shall include, at a minimum:

(a)  Notice of the licenses required to be obtained prior to the commencement of the test.

(b)  Reporting obligations structured to determine the progress of the test.

(c)  Consumer protection measures deemed necessary by the commissioner to be employed by the applicant.

(d)  The level of financial stability required to be in place for the test.

(e)  Duration of the test.

(f)  Permitted conduct under the no-action letter.

(g)  Any limits established by the commissioner on the:

(1)  Financial exposure that may be assumed by an applicant during the beta test;

(2)  Number of customers an applicant may accept;

(3)  Volume of transactions that an applicant or its clients may complete during the test; and

(4)  Metrics the commissioner intends to use to determine the innovation's utility.

(h)  A statement providing that the notice of registration and no-action letter shall expire unless:  

(1)  It is accepted by the applicant in writing; and

(2)  The acceptance is filed with the department within 60 days of the issuance of the notice.

IX.  The commissioner may deny any application submitted for any reason, at the commissioner's sole discretion, and the commissioner’s decision to grant or deny an application or an extension under this chapter shall not be appealable under the provisions of RSA 541-A.

X.  If the commissioner denies an application, the commissioner shall provide a written description of the reasons for the denial to the applicant.

XI.  If a no-action letter is granted pursuant to this chapter, the commissioner shall provide public notice of the existence of the letter by providing the following information:

(a)  The specific statute or regulation to which the no-action letter applies.

(b)  The name of the person who applied for and received the letter.

(c)  The duration of and any other terms, conditions, or limitations of the letter.

(d)  Any additional information deemed appropriate by the commissioner.

XII.  The notice requirement of paragraph XI may be satisfied by publication on the department’s Internet website.

400-C:5  Expiration and Renewal of Registration.

I.  The commissioner shall establish the sandbox participant’s registration time period.

II.  A sandbox participant may apply to renew the registration by submitting a written application to the commissioner no later than 30 days before the expiration date.  The renewal application shall contain the same information and include the same fee as the initial application.  The commissioner shall consider a renewal application and investigate the registrant in the same manner as an initial application.  The sandbox participant's registration shall be effective during the pendency of the renewal application.

III.  Upon expiration of an innovation registration, the person who obtained the no-action letter shall cease all activities that were permitted only by the letter and comply with all applicable insurance laws and regulations.

400-C:6  Requirements for Exiting Regulatory Sandbox.

I.  At least 30 days before the end of the regulatory sandbox testing period, a sandbox participant shall:

(a) Notify the commissioner that the sandbox participant will exit the regulatory sandbox.

(b)  Discontinue the sandbox participant's test, and stop offering any innovative product or service in the regulatory sandbox within 60 days after the day on which the testing period ends; or

(c)  Seek a renewal of registration in accordance with RSA 400-C:5.

II.  Subject to paragraph III, if the commissioner does not receive notification as required by paragraph I, the regulatory sandbox testing period shall end at the end of the testing period and the sandbox participant shall immediately stop offering each innovative product or service being tested.

III.  If a test includes offering an innovative product or service that requires ongoingduties, including any continuing obligations arising from an insurance contract, the sandbox participant shall continue to fulfill those duties or arrange for another person to fulfill those duties after the date on which the sandbox participant exits the regulatory sandbox.

400-C:7  Surety Bond or Deposit.

I.  The commissioner may require that a sandbox participant post a surety bond for the benefit of any consumers harmed by the test.  If the commissioner does require a bond, the commissioner shall specify the amount of the bond.  The commissioner may also require the sandbox participant to obtain insurance coverage to address any cybersecurity risks of the test.  Any consumers harmed by the test shall be the beneficiaries of this insurance coverage.  

II.  In lieu of a surety bond, the commissioner may allow a sandbox participant to make a deposit of cash or marketable securities for the benefit of any consumers harmed by the test with a bank approved by the commissioner, in an aggregate amount, based upon principal amount or market value, whichever is lower, of not less than the amount of the surety bond and subject to such conditions as the commissioner may specify.

III.  The surety bond or deposit shall remain in place for no less than one year after the sandbox participant ceases to be registered.  The sandbox participant shall give the commissioner 90 days' written notice before cancelling the surety bond or withdrawing the deposit.

400-C:8  Scope and Conditions of the Regulatory Sandbox.

I.  A no-action letter shall include any terms, conditions, and limitations deemed 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 utilize the underlying product or service.

II.  Pursuant to the authority granted by this chapter, the commissioner shall not grant a no-action letter with respect to any of the following:

(a) Any statute or rule that is not subject to the commissioner’s jurisdiction under Title XXXVII.

(b)  Any statute or rule concerning:

(1)  Assets, deposits, investments, capital, surplus, or other solvency requirements applicable to insurers;

(2)  Required participation in any assigned risk plan, residual market, or guaranty fund;

(3)  Any licensing or certificate of authority requirements; or

(4)  The application of any taxes or fees.

(c)  RSA 415-D, and RSA 417 of title XXXVII or any rules directly relating thereto;

(d)  Any law or regulation required for the insurance department to maintain its accreditation by the National Association of Insurance Commissioners, including but not limited to:  RSA 400-A:10; RSA 400-A:17-25; RSA 400-A:36; RSA 400-A:36-a; RSA 400-A:36-c; RSA 400-A:37; RSA 400-B:3; RSA 401:1; RSA 401.18; RSA 401-B:1-10, 13, 14; RSA 401-C:2-8; RSA 402:2; RSA 402:10, 12-14-a; RSA 402:27-29; RSA 402:29-c; RSA 402:30; RSA 402:42; RSA 402:54; RSA 402-C; RSA 402-E; RSA 402-F; RSA 402-G; RSA 404-B; RSA 404-D; RSA 404-H; RSA 404-F:1-10, 12-13; RSA 405:2; RSA 405:45-52; RSA 407-C:2; RSA 408-B; RSA 410; RSA 411:1; RSA 411:3; RSA 411-A; RSA 415-B:2; and RSA 420-B:25; and

(e)  Any other law or rule deemed ineligible by the commissioner.

III.  The authority granted to the commissioner under this section shall not be construed to allow the commissioner to grant or extend a no-action letter that would abridge the recovery rights of New Hampshire policyholders.

IV.  Notwithstanding any other provision of this chapter, a sandbox participant shall not have immunity related to any criminal offense committed during the sandbox participant's participation in the regulatory sandbox.

V.  By written notice, the commissioner may end a sandbox participant's participation in the regulatory sandbox at any time and for any reason, including a determination by the commissioner that a sandbox participant is not operating in good faith to bring an innovative product or service to market, or, following receipt of information or complaints, a determination by the commissioner that the test is causing consumer harm.

VI.  For any violation of the terms or conditions set forth in the no-action letter, the commissioner may:

(a)  Issue an order terminating the test and the safe harbor of the no-action letter before the time period set forth in the letter has expired;

(b)  Issue an order requiring a sandbox participant to cease and desist any activity violating the terms or conditions set forth in the limited letter; and

(c)  Impose a fine of not more than $2,500 per violation.

400-C:9  Authority to Investigate and Examine.

I.  The commissioner may investigate, under the terms of RSA 400-A:16, or examine, under the terms of RSA 400-A:37, a sandbox participant at any time to determine compliance.

II.  The commissioner may assess the sandbox participant the actual costs of conducting the investigation or examination, including time spent at the hourly rate for the commissioner’s staff.

III.  All documents, materials, or other information in the possession or control of the insurance department that are created, produced, obtained, or disclosed in relation to this chapter and that relate to the financial condition of any sandbox participant shall be confidential and shall not be subject to public disclosure pursuant to RSA 91-A.

400-C:10  Required Disclosures.

I.  Prior to providing a technologically innovative product or service to consumers, and included in any marketing information, a sandbox participant shall disclose to consumers the following:

(a)  The name and contact information of the sandbox participant.

(b)  A statement that the technologically innovative product or service is authorized pursuant to the regulatory sandbox program.

(c)  A statement that the state of New Hampshire does not endorse or recommend the technologically innovative product or service.

(d)  A statement that the technologically innovate product or service is a temporary test that may be discontinued at the end of the testing period, including the expected end date of the testing period.

(e)  A statement that consumers may contact the consumer services division at the insurance department to file complaints regarding the technologically innovative product or service being tested, including the telephone number and website address where complaints may be filed.

II.  The commissioner may require that a sandbox participant make additional disclosures to consumers.  When the commissioner approves an application for entry into the regulatory sandbox program, the commissioner shall notify the participant of the additional disclosures.   

400-C:11  Rulemaking.  The commissioner may adopt rules pursuant to RSA 541-A for the purposes of implementing this chapter as deemed necessary.

3  Effective date.  This act shall take effect July 1, 2020.









AN ACT establishing an insurance regulatory sandbox program to temporarily test insurance technology products and services.


FISCAL IMPACT:      [ X ] State              [    ] County               [    ] Local              [    ] None




Estimated Increase / (Decrease)


FY 2020

FY 2021

FY 2022

FY 2023
















Funding Source:

  [ X ] General            [    ] Education            [    ] Highway           [ X ] Other -







This bill establishes an insurance regulatory sandbox program to temporarily test insurance technology products and services.  The Insurance Department indicates this bill creates a way for innovative insurance technology products to come into New Hampshire's insurance market. The Department assumes the bill may impact the insurance market by leading to new products or the development of cheaper, more innovative products.  These effects may impact State premium tax revenue.  The Department expects these effects, if any to be very small.



Insurance Department



SB453 at GenCourtMobile
SB453 Discussion

Action Dates

Date Body Type
Jan. 14, 2020 Senate Hearing

Bill Text Revisions

SB453 Revision: 7655 Date: Dec. 20, 2019, 11:03 a.m.


Date Status
Jan. 8, 2020 To Be Introduced 01/08/2020 and Referred to Commerce; SJ 1
Jan. 14, 2020 Hearing: 01/14/2020, Room 100, SH, 01:00 pm; SC 2
March 5, 2020 Committee Report: Referred to Interim Study, 03/05/2020; Vote 5-0; CC; SC 9
March 5, 2020 Refer to Interim Study, MA, VV; 03/05/2020; SJ 5