Insurance Technology Strategy and Regulatory Compliance, Vol. 7

Report Summary

Insurance Technology Strategy and Regulatory Compliance, Vol. 7

 

 

Mitch Wein
Head of Financial Services Executive Partner Service
Other Author: 
Brian Casey

August 10, 2021 – Locke Lord LLP and Aite-Novarica Group examine best interest regulations in the life/annuity/benefits space placing additional requirements on broker-dealer compensation systems, regulatory reporting, and real-time monitoring; AM Best’s proposed Delegated Underwriting Authority Enterprise (DUAE) rating, that will highlight deficiencies in DUAEs’ technology ecosystems; and the long-term effects of the pandemic on the insurance industry, covering product features in areas like employment practices liability insurance (EPLI), business interruption, and voluntary benefits.

Best interest regulations in the life/annuity/benefits (L/A/B) space will place additional requirements on broker-dealer compensation systems, regulatory reporting, and real-time monitoring. Carriers are responding by integrating best-of-breed packages using APIs and/or replacing legacy systems.

Delegated Underwriting Authority Enterprises (DUAEs, e.g., MGAs, MGUs, and program underwriters) often have technology needs similar to carriers. These types of firms frequently have immature technology ecosystems, which AM Best’s proposed DUAE rating will highlight.

The pandemic will have long-term effects on the insurance industry, covering product features in areas like employment practices liability insurance (EPLI), business interruption, and voluntary benefits. The continued and expanded use of digital technologies, the related growth of IT security concerns, and the increasing and dynamic nature of regulations are all placing additional demands on IT capabilities.

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