We’re at an inflection point with blockchain technology. A greater community of interest has developed beyond cryptocurrency with the realization that blockchain can solve all types of problems. Insurance regulators nationwide are starting to create “sandboxes,” essentially incubators where new technologies and innovations can be developed and tested, exempt from prohibitive regulations, until a proper regulatory framework can be created.
Nearly a dozen states have introduced or passed into law some sort of “sandbox act” for blockchain. This is a significant development. Regulators are backing the exploration of blockchain, not within an industry, but on its own merits. On Oct. 15, North Carolina enacted the Financial and Insurance Regulatory Sandbox Act, which includes language specific to blockchain initiatives: “The Innovation Council may explore, receive input, analyze, and make recommendations, with respect to blockchain initiatives and the application of blockchain technology, that would additionally provide benefit to the State, its consumers, and its industry.”
After two years, Florida recently released the Florida Blockchain Task Force Report, to explore and develop a master plan for fostering the expansion of the blockchain industry in the state. The goal is to help make Florida a leader in blockchain technology. AAIS’s Vice President of Government Affairs, Legal & Compliance, Robin Westcott, served as a member on this task force
Recently, North Dakota’s Department of Transportation (DOT) issued a request for information (RFI) to utilize blockchain technology to identify uninsured motorists by linking North Dakota DOT data.
At AAIS, we’ve pioneered blockchain technology for insurance with openIDL (Open Insurance Data Link). We executed a Proof of Concept (POC) centered on a National Association of Insurance Commissioners (NAIC) data call surrounding the impact of the COVID-19 pandemic on the business interruption insurance market. Regulators from nine states, two leading insurance carriers, and AAIS, as the licensed statistical agent, participated in the POC, which proved that insurer information could be correlated with data from other sources to reveal deeper, previously unattainable insights. And importantly, insurer data could be leveraged by regulators, while remaining private, secure and in full control of participating carriers
It’s all part of a greater movement with regulators starting to see the value of blockchain. AAIS is excited to be leaders on blockchain technology and that excitement is starting to seep into the industry through the support of state governments and “blockchain sandboxes.”