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Scott signs law to allow regulatory waivers for new insurance products; Legislature makes plans for 2020

Gov. Phil Scott signed a bill (S.B.131), to give the Department of Financial Regulation the ability to adopt limited regulatory waivers to innovative, new financial products. This was the main legislative achievement during the 2019 Vermont legislative session. The new law creates what is known as a regulatory sandbox to allow companies to apply for a waiver from certain regulations to test a new product. Instead, the new product will be monitored closely under consumer protection requirements. Within two years, the waiver expires and by then the product must comply with regulations. These waivers may indicate changes to regulations that could be made to make the market more competitive without compromising consumer safety. Under the new law, insurance products qualify as financial products, which benefits insurers in Vermont because they now are able to utilize this new law in their future innovation strategies.

State politician considered paid family and medical leave to be top priorities this legislative session. However, the General Assembly was unable to agree on the programs prior to the end of the legislative session. Scott kicked off the session by introducing his joint plan with New Hampshire Gov. Chris Sununu. The plan would have given employers the ability to opt in to a six-week leave program. Only state workers would have been covered automatically. However, both state’s Legislatures rejected the plan. Vermont’s Senate passed its Paid Family Medical Leave plan by a 19-10 vote in May 2019, but the House failed to reach an agreement on either the Senate plan or an alternative. Many believed the plan would have been vetoed by Scott—as it would have been mandatory for all employers in Vermont—and Scott publicly stated he would veto a mandatory program. House and Senate leadership plan to work on the issue over the summer and pass a program in 2020.

The same dynamics plagued the discussions around an increase in minimum wage in Vermont. After Scott vetoed an increase in 2018, legislators feared the same would happen if they passed the same plan in 2019. Additional concerns regarding the impact on rural employers and the Medicaid budget caused discussions to stall until end of session. By then, the House and Senate ran out of time to come to an agreement. They also plan to work on this issue over the summer.

While the blockbuster issues may have been delayed until 2020, the House and Senate leadership have cited other issues as achievements for 2019. They include environmental work (i.e., legislation to improve water quality throughout Vermont by distributing funds by region); and a sustainable funding system was created to ensure future monies will be directed as necessary. Agreements with Scott on public education funding, child-care funding and women’s reproductive rights also ranked as top achievements for House and Senate leadership.

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