Wade Eyerly, Degree Insurance CEO, recently addressed a session of the National Council of Insurance Legislators regarding Insurance Regulatory Sandboxes.
At a recent meeting of the National Council of Insurance Legislators, Degree Insurance CEO, Wade Eyerly addressed a committee on Insurance Regulatory Sandboxes. The goal of the Insurance Regulatory Sandbox is to ease regulatory hurdles for companies that want to introduce new and creative insurance ideas and products. This is often a challenge in a highly regulated industry like insurance, as policies and practices do not change at the same speed as innovation. As Degree Insurance is a new concept, unlike any many regulators may have seen before, Insurance Regulatory Sandboxes can be an important tool to bring needed products to market.
The Honorable Evan Daniels, Director of the Arizona Department of Insurance and Financial Institutions, also spoke to the committee and said “The marketplace moves a whole lot faster than we can respond to it and I think it behooves us to create structures that enable open communication. It’s much better to understand what might be happening and the things that are developing in the marketplace so that we can be part of that development as policymakers, as regulators, whatever your role may be.”
Degree Insurance, now licensed in 10 states, is also a proponent of the Insurance Regulatory Sandbox. Eyerly said, “We have created a novel type of insurance where we guarantee the salary that a student earns five years after they graduate college. What a sandbox lets us do is open up opportunities for us to begin to innovate with products like ours in small ways in states where the current regulatory framework just frankly didn’t consider a product like ours before. So, it unlocks the opportunity for us to try things in a very small targeted way, prove that it works, prove that it’s safe, and then expand from there.”
Degree Insurance has not yet had the chance to use an Insurance Regulatory Sandbox, but would like to. “We’d love to see one that worked that addresses the specific challenges that we have, things like seasoning, things like statutory requirements that on a micro-level may exceed what’s reasonable, that’s so far beyond a risk based capital requirement that again, things like what we’re doing just likely weren’t considered when those regulations were written. So, the sandbox gives a state the free hand to help promote innovation in very important ways and we’re big fans of the concept.”
CEO Wade Eyerly and President Dennis Murashko co-founded Degree Insurance.