Insurance industry needs to keep pace with data security by streamlining feeds

By Susan Yellin | May 04 2016 07:00AM

The Canadian life and health insurance industry is making good strides in moving ahead with electronic data exchange, but now needs to ensure that it is keeping pace with ongoing compliance and cyber security issues, a conference was told.

Tana Sabatino, implementation services specialist at the Canadian Life Insurance EDI Standards (CLIEDIS), told the organization’s annual seminar in Toronto in April that its top goal for this year is to concentrate on getting reliable feeds from the advisor to the distributor and over to the carrier.

“This year our role is to get properly connected to the carriers so that we get that information and we stay in the loop so we can act as a single source about implementation activity on data feeds,” said Sabatino.

CLIEDIS is the industry association that promotes using electronic data among key members of the life insurance industry, including advisors, managing general agencies (MGAs) and life insurance carriers.

Part of that agenda calls for CLIEDIS to ensure data security among members by streamlining the amount of feeds a distributor needs to connect with carriers.

Sabatino said there can’t be a situation in which every carrier has a different data stream agreement that each imposes on MGAs. “HUB [for example] isn’t going to implement 15 different security sets of requirements. They’re going to have one, because they have one set of systems.”

Define common terms

But before that can be done, she said the industry needs to define and use common terms, determine the kinds of protections that are truly needed and figure out how to deliver the feeds with systems that have different architecture.

Some firms have administration systems that are up to 45-years-old and will not align easily with more modern systems. “We understand there are certain situations that we just can’t avoid, but there are a lot of things that can be avoided and this is what we’re asking companies to do.”

Mike Daicoff, chair of the CLIEDIS data security working group, said CLIEDIS has drawn up a set of draft data security measures and has sent them out for comment. Daicoff, who is also vice president, application development and enterprise architecture at ivari (formerly Transamerica Life), said the work has resulted in a proposal of a single set of data protections. These protections could serve as a template, with the potential to be applied to all confidential data received by trading partners across the industry.

Sabatino acknowledged that getting reliable feeds can be painstakingly slow, sometimes with one product at a time being set up.

In fact, Phil Booth, vice president and general manager at PPI Solutions Inc., said talks first began with carriers about data feeds back in 1989. “We’re still talking about feeds,” said Booth. “How do we get the carriers to pick up the pace a little bit?”

But Sabatino said CLIEDIS has changed its approach and is moving from a passive organization to a pro-active group, setting the organization on a straighter path.

“We’re appealing to you, we’re advocating in order to get the feeds out the door. That has turned into the fact that we’re seeing feeds actually happening and companies are committing resources to getting distributors the data that they need.”

In an interview, Sabatino said Manulife’s decision in 2011 to create a new term insurance product that could only be submitted as an electronic application has helped propel the industry forward.

Manulife e-app feed

As part of its rollout, Manulife built a feed to notify distributors that an application was received for its e-app. Without that, advisors would have had to enter the application into the e-app system manually. It would go to the carrier, but the distributor wouldn’t know about the business.

But when Manulife implemented the feed, HUB Financial was surprised to learn that not only were its electronic applications in the feed, so were the paper applications. The distributor received the feed and no longer needed to manually enter Manulife applications into its agency management system.

Other carriers are now developing an e-app notification feed for their electronic applications, said Sabatino.

“The Manulife e-app has spurred the rest of the industry to reconsider the information they are providing electronically to their distributors,” she said.

PPI’s Booth told the conference that his MGA deals with about 20 carriers, but its main purpose is to provide information to its advisors to better service clients. He said the information to do that has to come from the carrier to the advisors, pointing out the significance of the work CLIEIDIS is doing.

“An advisor is only going to be as effective as the information they have on hand,” he said. By consolidating information at the distribution level, it will provide advisors with a more complete picture of products and services, increasing the quality of advice they can provide to their clients, he said.

Heather Clarke, vice president, IG Insurance Services Inc. at Winnipeg-based Investors Group, said her company is a rather unique model because it has its own distribution system. She added all different distribution models need to be at the table to discuss the future of feeds and what’s needed down the road.

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