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November 13, 2018

IAIS published an application paper on the use of digital technology in inclusive insurance, along with the resolution of comments on the draft application paper. The consultation on the paper ran from February 2018 to March 2018. IAIS also published an issues paper, along with its response to comments received on the consultation, on the increasing digitalization in insurance and its potential impact on consumer outcomes. The consultation on the issues paper took place from August 2018 to September 2018.

The application paper on the use of digital technology in inclusive insurance provides guidance to supervisors, regulators, and policymakers when considering, designing, and implementing regulations and supervisory practices on the use of digital technology in inclusive insurance. The paper describes a typical inclusive insurance market and a typical inclusive insurance customer, to offer context of the operating environment of a supervisor. It also outlines the use and implications of digital technology within inclusive insurance markets and builds the context in which the Insurance Core Principles (ICPs) should be proportionately applied. The paper provides application guidance on the relevant ICPs in the context of the use of digital technology in inclusive insurance. The paper also examines the aspects of fintech and insurtech in inclusive insurance. 

The issues paper on digitalization in insurance is aimed to consider the impact of the increasing use of digital technology in insurance. It examines consumer outcomes and discusses the implications of digitalization for insurance supervision. The paper recognizes that the impact of digitalization may differ among jurisdictions, depending on the legal frameworks in place. A distinction should be made between applications and the data/information these applications use or generate. While this paper covers both innovative applications and—more generally—the use of data, IAIS expects to publish a separate paper on the use of personal and other data from a "conduct of business" perspective. This paper provides these considerations in the context of other IAIS work on fintech and insurtech. Accordingly, the paper focuses on the product design and underwriting, along with the marketing, sales, and distribution aspects of the insurance value chain. However, the impact of the increasing use of digital technology on other aspects of the insurance value chain will be addressed in other IAIS material.

Keywords: International, Insurance, Inclusive Insurance, Proportionality, ICP, Insurtech, Fintech, IAIS

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