A North Carolina Senate committee has advanced a bill supporters said would protect consumers from harmful products and services and offer them more choices.
House Bill 624, dubbed the North Carolina Regulatory Sandbox Act, allows companies to temporarily offer trials of financial or insurance products or services to consumers without being subjected to certain licensing or other regulatory requirements.
“This will give that oversight that will serve as not to hold up through an overburdensome regulatory process that doesn’t understand new products,” said Rep. Jason Saine, R-Lincoln, one of the bill’s sponsors.
HB 624 creates a North Carolina Innovation Council to select insurance or financial companies or entrepreneurs for a two-year sandbox program. Those selected would be authorized to offer an “innovative” product or service. An “innovative product or service” is defined in the legislation as a product or service that uses technology to address a problem, provide a benefit or create something novel in the state. Products could include cryptocurrency or blockchain technology.
Under the legislation, the program will be overseen by either the Office of the Commissioner of Banks or the Department of Insurance, depending on the product or service being offered.
The 11-member North Carolina Innovation Council would include the commissioner of banks, commissioner of insurance, secretary of state and the attorney general, or their designees. The governor and legislative leaders each would appoint two members from the public, and the lieutenant governor would assign one member from the public to the council.
The bill cleared the Senate Committee on Commerce and Insurance on Tuesday. It received unanimous support in the House. Backers of the bill hope it would propel North Carolina to the top of the technology industry and a leader in innovation.
Those who apply for the program would pay a $50 application fee and a $450 participation fee to the state. The council will determine whether to charge more fees for the program.
Raleigh-based free-market think-tank John Locke Foundation said a regulatory sandbox will keep North Carolina competitive and encourage more businesses to come to the state.
“One of the most significant obstacles for new and growing businesses involves regulatory restrictions,” John Locke Senior Political Analyst Mitch Kokai said. “The idea behind the regulatory sandbox is to give entrepreneurs a limited amount of time to experiment with innovative new products, services, and business models without the typical regulatory burden. That change will draw new businesses to the state. That means new jobs and more tax revenue flowing into the state’s tax coffers.”
