{"data":{"id":"us-ky/krs-304.3-705","jurisdiction":"us-ky","citation":"KRS 304.3-705","heading":"Application for admission to regulatory sandbox -- Disclosure and","body":"stability requirements -- Disqualifying factors -- Participation in regulatory\nsandbox under KRS 15.268.\n(1) Except as provided in subsection (2) of this section, on or before December 31,\n2030, a person may apply to the department for admission to the sandbox by\nsubmitting an application in the form prescribed by the commissioner, accompanied\nby the following:\n(a) A filing fee of seven hundred fifty dollars ($750);\n(b) A detailed description of the innovation, which shall include:\n1. An explanation of how the innovation will:\na. Add value to customers and serve the public interest;\nb. Be economically viable for the applicant;\nc. Provide suitable consumer protection; and\nd. Not pose an unreasonable risk of consumer harm;\n2. A detailed description of the statutory and regulatory issues that may\nprevent the innovation from being currently utilized, issued, sold,\nsolicited, distributed, or advertised in the market;\n3. A description of how the innovation functions and the manner in which\nit will be offered or provided;\n4. If the innovation involves the use of software, hardware, or other\ntechnology developed for the purpose of implementing or operating it, a\ntechnical white paper setting forth a description of the operation and\ngeneral content of technology to be utilized, including:\na. The problem addressed by that technology; and\nb. The interaction between that technology and its users;\n5. If the innovation involves the issuance of a policy of insurance, a\nstatement that either:\na. If the applicant will be the insurer on the policy, that the applicant\nholds a valid certificate of authority and is authorized to issue the\ninsurance coverage in question; or\nb. If some other person will be the insurer on the policy, that the\nother person holds a valid certificate of authority and is authorized\nto issue the insurance coverage in question; and\n6. A statement by an officer of the applicant certifying that no product,\nprocess, method, or procedure substantially similar to the innovation ha s\nbeen used, sold, licensed, or otherwise made available in this\nCommonwealth before the effective filing date of the application;\n(c) The name, contact information, and bar number of the applicant's insurance\nregulatory counsel, which shall be a person wi th experience providing\ninsurance regulatory compliance advice;\n(d) A detailed description of the specific conduct that the applicant proposes\nshould be permitted by the limited no-action letter;\n(e) Proposed terms and conditions to govern the applicant's beta test, which shall\ninclude:\n1. Citation to the provisions of Kentucky law that should be excepted in\nthe notice of acceptance issued under KRS 304.3-710(6); and\n2. Any request for an extension of the time period for a beta test under\nKRS 304.3-720(1) and the grounds for the request;\n(f) Proposed metrics by which the department may reasonably test the\ninnovation's utility during the beta test;\n(g) Disclosure of all:\n1. Persons who are directors and executive officers of the applicant;\n2. General partners of the applicant if the applicant is a limited partnership;\n3. Members of the applicant if the applicant is a limited liability applicant;\n4. Persons who are beneficial owners of ten percent (10%) or more of the\nvoting securities of the applicant;\n5. Other persons with direct or indirect power to direct the management\nand policies of the applicant by contract, other than a commercial\ncontract for goods or nonmanagement services; and\n6. Conflicts of interest with respect to any person listed in this paragra ph\nand the department;\n(h) A statement that the applicant has funds of at least twenty -five thousand\ndollars ($25,000) available to guarantee its financial stability through one (1)\nor a combination of any of the following:\n1. A contractual liability insurance policy;\n2. A surety bond issued by an authorized surety;\n3. Securities of the type eligible for deposit by authorized insurers in this\nCommonwealth;\n4. Evidence that the applicant has established an account payable to the\ncommissioner in a federally i nsured financial institution in this\nCommonwealth and has deposited money of the United States in an\namount equal to the amount required by this paragraph that is not\navailable for withdrawal, except by direct order of the commissioner;\n5. A letter of credit issued by a qualified United States financial institution\nas defined in KRS 304.9-700; or\n6. Another form of security authorized by the commissioner; and\n(i) A statement confirming that the applicant is not seeking authorization for, nor\nshall it engage in, any conduct that would render the applicant unauthorized to\nmake an application under subsection (2) of this section.\n(2) (a) The following persons shall not be authorized to make an application to the\ndepartment for admission to the sandbox:\n1. Any person seeking to sell or license an insurance innovation directly to\nany federal, state, or local government entity, agency, or instrumentality\nas the insured person or end user of the innovation;\n2. Any person seeking to sell, license, or use an insurance innovation that\nis not in compliance with subsection (1)(b)5. of this section;\n3. Any person seeking to make an application that would result in the\nperson having more than five (5) active beta tests ongoing within the\nCommonwealth at any one (1) time; and\n4. Any person seeking a limited or extended no -action letter or exemption\nfrom any administrative regulation or statute concerning:\na. Assets, deposits, investments, capital, surplus, or other solvency\nrequirements applicable to insurers;\nb. Required participation in any assigned risk plan, residual market,\nor guaranty fund;\nc. Any licensing or certificate of authority requirements; or\nd. The application of any taxes or fees.\n(b) For the purposes of this subsection, \"federal, state, or loc al government entity,\nagency, or instrumentality\" includes any county, city, municipal corporation,\nurban-county government, charter county government, consolidated local\ngovernment, unified local government, special district, special purpose\ngovernmental entity, public school district, or public institution of education.\n(3) Notwithstanding any other provision of this chapter, a person regulated under this\nchapter may participate in the regulatory sandbox described in KRS 15.268 if the\nperson is:\n(a) Not authorized to make an application under this section; or\n(b) Seeking regulatory relief that is not available under KRS 304.3 -700 to 304.3-\n735.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=56199","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:38Z","sha256":"300d685cbf3f91060132963b7e2eb413c323e9ca1fcbe803a0de439438a3d243","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.3-700","next":"us-ky/krs-304.3-710"},"notice":"GroundRules: Original legal text. Not legal advice."}