To help policymakers and stakeholders better understand the issues of open insurance and the data sharing involved, the Global Federation of Insurance Associations (GFIA) has released a list of dos and don’ts to serve as a rough guideline.
According to the GFIA, there have been several initiatives to open up insurance and related data across the world in recent years, but not all jurisdictions have considered such things. Moreover, the GFIA recognizes that even among jurisdictions that have proposed open insurance initiatives, there is still a need to carefully take into account the risks involved. Thus, the federation has drafted its list of dos and don’ts.
GFIA’s list of open insurance dos and don’ts is as follows:
|
Issues |
Do |
Don’t |
|---|---|---|
|
Purpose-driven data-sharing |
Do have a clearly defined and predetermined purpose or goal to data sharing. Possible goals could be to enable the insurance sector to develop new and innovative products. |
Don’t impose (mandatory) data sharing in areas where there is no clear issue that needs to be addressed. New data-sharing or open- data initiatives should not impede existing data-sharing initiatives and open-data ecosystems. |
|
The data owner in control |
Do give data owners the ultimate control over who is allowed to access their data and under which conditions. A definition of who the data owner is in an open-insurance framework, should be determined at the level of each jurisdiction in which such a framework exists. Furthermore, a workable consent mechanism should exist. |
Don’t let data-sharing or open-insurance initiatives interfere with existing privacy and data protection laws. |
|
Setting the appropriate scope |
Do clearly define which data sets would be subject to data sharing. Data usage, access and sharing should also be considered in the broader context of cross-sectoral data sharing. |
Don’t oblige insurers to share their intellectual property, business-sensitive information or proprietary data that they have generated and that is the outcome of their own work. |
|
An appropriate framework for insurance |
Do carefully consider the lessons learned from possible previous open data-sharing initiatives in the banking and payments sectors. These lessons can be applied to the specific context of the insurance sector to avoid repeating mistakes. |
Don’t simply copy and paste open-banking or open-payment schemes and apply them to the insurance sector and insurance data. There are likely to be unintended consequences and they may not yield the desired results. |
|
Level playing field |
Do ensure a level playing field for the different parties involved in data sharing. The principle of same activities, same risks and same rules should apply. It is crucial to ensure that consumers can count on the same level of protection, regardless of who serves them, bringing all involved parties within the scope of the existing rules. |
Don’t allow unregulated or unsupervised third parties to access insurance data. Furthermore, non-reciprocity of data sharing must be avoided by ensuring the progressive openness of common data spaces in other economic sectors. Also don’t exclude any current third-party players, (such as intermediaries) from the insurance sector value chain from gaining access to an open insurance framework. |
|
Data security |
Do require high levels of security to be in place to ensure the protection of data and clarify where liability lies in the event of a breach. |
Don’t allow access to insurance data for third parties that do not demonstrate that they meet the same high level of data security as the financial sector. |
“The GFIA list serves as a potential source of information for its members in jurisdictions in which steps towards an open-insurance or data-sharing framework are being considered,” the organization explained in a statement. “The document can also be used in discussions with local regulators and supervisors.”
Last November, the GFIA elected Susan Neely – president and CEO of the American Council of Life Insurers – as president of the federation. Together with Neely’s appointment, the organization also named Tim Grafton, chief executive of the Insurance Council of New Zealand, as vice president of the GFIA, and Norma Alicia Rosas, director general of Associaciòn Mexicana de Instituciones de Seguros, as membership executive.
