What Will Insurers Face on the Regulatory Front in 2015?
Increased focus on global governance
Monique Hesseling, Partner, Strategy Meets Action
The execution and implementation of the Affordable Care Act is top of mind for US insurance regulators. There are many other, non-health-insurance regulatory issues, though, that will require attention from insurance carriers.
[HealthCare.gov Names Counihan Its First CEO.]
Large global insurers might be impacted by increased global coordination and developing regulation on capital standards and systemic risks. Regulators will pay the usual attention to the captive industry, which might result in new or revised regulations around captives. Especially Life and Annuity insurers are considering the implication of the Dodd-Frank Act in their sales processes, and all carriers will have to incorporate compliance with new regulations around Enterprise Risk Management reporting and corporate governance. A lot is going on in different insurance markets.
All insurers will have to address the increased regulation and governance requirements in the area of data breaches and cyber activities. Although some of the issues discussed before are continuations of prior years’ legislative efforts, others are new or significantly different.
For example, there is an increased focus on global governance over internationally operating insurers, and especially between Europe and the US. Government bodies and industry representatives have made proposals addressing international governance. On the other side of the spectrum, here in the US regulators are expected to address some of the new consumer or small business insurance products, such as ride-sharing or the autonomous car.
The future of the Terrorism Risk Insurance Act of 2002 (TRIA) will continue to be debated, as will the details and parts of the Affordable Care Act. Specifically in the Life and Annuity space, the impact of Dodd-Frank on sales processes and related reporting and documentation will continue to be reviewed. The ongoing debate about federal government supervision over the insurance industry versus individual state governance and oversight will continue, fueled by the recent shift in political power.
Most, if not all, of these regulatory changes will require some technology investments. Obviously all regulation around data privacy and security has major technology and systems implications. In addition, many of the new regulations incorporate reporting standards. These requirements will drive technology projects around business intelligence, data warehousing, and reporting capabilities.
The key technology areas that will be impacted by changed regulations are data capture, data storage, access and management, and reporting capabilities. So if insurers want to prepare better for new or changed regulations, they should prioritize data projects, data infrastructure, and reporting capabilities. Having complete, accessible, and well-managed data in an efficient and accurate reporting capability will position insurers well for most new regulations.
Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio
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