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Healthy response to global compliance database request for proposal

Published: 22 February 2012

Wednesday 22 February 2012

Healthy response to global compliance database request for proposal

The Request for Proposal inviting potential service providers to show an interest in delivering a Database of International Insurance Requirements has produced a healthy response, with more than a dozen organisations coming forward. The database will contain details of regulations on a territory-by-territory basis, making it easier for risk carriers, their clients and brokers to ensure that insurance programmes comply in every territory where cover is provided.

Although Airmic is leading the initiative, the database will be a market-owned facility. It has the support of many other organisations, including the International Underwriting Association (IUA), London and International Insurance brokers Association (LIIBA) and the European risk management federation, FERMA.

Airmic technical director Paul Hopkin said interest had been shown by law firms, insurers, software companies and enterprises that specialise in providing insurance databases. Others, such as brokers, have offered to support the project even though they do not feel able to create the database themselves.

He said the next step would be to consult with market bodies supporting the project and then to invite responses to a more detailed request for proposal.

The main focus will be to provide global guidance on admitted and non-admitted insurers by jurisdiction. This varies not only between countries, but also within some territories such as the US. It can also depend on the class of business being written. Failure to comply can result in fines, cancellation of cover, reputational damage and, in exceptional cases, imprisonment.

“We are very encouraged by the amount support that people are showing this project. It is clearly an idea whose time has come,” said Hopkin. “We are, though, under no illusion that this is going to be an enormous challenge, and that is best tackled at a market level.”

A survey by Airmic in June found global compliance to be the number two ‘stay awake at night’ issue for its members. No date has been set for completion of the project, but it is anticipated that work will continue throughout next year.

Other aspects of compliance to be captured by the database include:

·         Pre-renewal information, including statutory obligations and restrictions

·         Placement structure, including details of use of local carriers

·         Insurance contract, including details of mandatory forms and wordings

·         Premium payment, including details of local tariffs and payment protocols  

·         Claims notification and processing, including payment restrictions

·         Consequences of non-compliance, including enforceability and penalties

Contact: Mark Baylis, +44(0)7775 693994, mark.baylis@airmic.co.uk