AAIS conducted a Proof of Concept (POC) using the open Insurance Data Link (openIDL) for regulatory reporting. The results demonstrated that this blockchain/distributed ledger technology can dramatically improve both the output and process of insurance regulatory reporting for insurers and regulators.
The qualified Proof of Concept for openIDL centered on a National Association of Insurance Commissioners (NAIC) data call for information to assess the impact of the COVID-19 pandemic on the business interruption insurance market. Two leading insurance carriers, regulators from nine states, and AAIS, as the licensed statistical agent, participated in the Proof of Concept.
During the process, business addresses of Federal Payroll Protection Plan (PPP) loan recipients were correlated with policyholder addresses, supplementing policy records with loan recipient details without exposing raw data. The ability to associate insurer-provided data with third-party sources, in this instance, the PPP loan data (in others, Census or other data), can illuminate other insights of practical use to regulators, insurers, and other stakeholders, while maintaining the privacy of carrier data.
This pilot unearthed several advantages openIDL offers over traditional methods of regulatory reporting, including:
- insurer information could be correlated with data from other sources to reveal deeper, previously unattainable insights
- insurers could deliver far timelier data, more efficiently and potentially instantaneously once their dedicated openIDL “node” is populated
- insurer data could be leveraged by regulators, while remaining private, secure and in full control of participating carriers.
“This Proof of Concept set out to assess whether openIDL is a viable solution to improve regulatory reporting and elevate data management across the insurance ecosystem, and it passed this initial test with flying colors,” said Ed Kelly, President and CEO, AAIS. “This is a potentially game-changing development for all stakeholders in the insurance industry.”
“The insights openIDL generates can both ease and elevate regulatory reporting. It opens opportunities for insurers to gain valuable information they can use for wide-ranging purposes, such as better managing their portfolios and target marketing, while giving regulators more meaningful information to steer policy making,” said Robin Westcott, Vice President & General Counsel, AAIS. “With openIDL, the entire compliance process also happens far more quickly and efficiently for all parties.”
For more information, visit the openIDL information page here.
openIDL was initially developed by AAIS and has now been adopted as a Linux Foundation Project where it is being expanded and evolved as the next-generation standard for statutory and periodic reporting and for broader application.