Business Insurance RMIS Article

Data standard seen: First draft possible in six months"

April 9, 2001

by Dave Lenckus

CHICAGO-Recent agreements reached by the Risk & Insurance Management Society Inc., a standards-making organization and insurance industry officials have accelerated the development of a risk management data standard, according to risk management officials involved in the project.

As a result of the agreements, reached late last month, the insurance and financial industry standards developer may have the first draft of a standard for transmitting an extensible markup language-or XML-data stream for monthly loss runs over the Internet within six months, said Elizabeth M. Morrell, who chairs the Data Standard Task Force of the RIMS Technology Advisory Council subcommittee. The subcommittee put the data standard development project on the fast track last year by bringing in the standards developer, the Assn. for Cooperative Operations Research & Development of Pearl River, N.Y. (BI, Dec. 4, 2000).

The lack of a claims data standard presents many problems for risk managers. Insurers and third-party administrators define data in various ways in their proprietary claims-handling systems. As a result, risk managers face a difficult, time-consuming and expensive task of converting supposedly identical data elements that they receive from various claims-handling sources into data that truly match up on an apples-to-apples basis.

A data standard that is available in the XML format would both eliminate those headaches for risk managers and facilitate the transmission of the data over the Internet. The XML format allows those who want to exchange Web-based data over the Internet to tag data and define it in specific ways.

At year-end 2000, the effort by RIMS, ACORD, the Insurance Data Management Assn. and the Insurance Services Office Inc. had resulted in a draft standard for how risk managers seeking policy quotes would submit information about their exposures to insurers over the Internet.

At a meeting of 38 representatives from those groups in Chicago March 27-28, risk managers agreed to accept ACORD's existing first-notice-of-loss XML data stream standard and move on to the more important and potentially trickier loss-run standard, according to Ms. Morrell, the risk management information systems administrator at Atlanta-based Southern Co., an electric utility holding company.

To that end, the group agreed to largely adopt a data dictionary that the IDMA has written and to incorporate the XML tags that ACORD has developed for that data. The dictionary provides a standard data definition that all risk managers, brokers, TPAs and insurers would use in developing and exchanging various insurance and loss reports.

In addition, the group agreed to harmonize dictionary definitions that are inconsistent with several other sources. Those sources include some data definitions that risk managers developed at the meeting and a RIMS glossary of risk management terms.

``Considerable progress was made exploring the semantics and definitional barriers that might otherwise separate the parties,'' said Christopher Mandel, RIMS vp-member and chapter services and assistant vp-enterprise risk management at USAA Group in San Antonio.

A draft loss-run standard would be developed for one or two lines of coverage initially, but loss-run standards for other lines would follow, Ms. Morrell said.