In its annual insurance CIO survey report published last January, Celent predicted 2005 would be "the year of policy admin." While the high volume of policy administration requests for information (RFI) and deals we've seen over the year confirm this prediction, the trend shows no signs of abating in 2006. Policy admin continues to be a top initiative for insurers moving into 2006, second only to continued improvements in distribution and e-business.

In the past year, carriers have continued to focus on the same business drivers as they have in recent years. Vendors of policy administration systems (PAS), however, seem to have done a better job at rolling out features that help carriers address these business drivers. Here's a look at carriers' current needs–from speed-to-market requirements to the new regulatory challenges–and, more important, what vendors are doing to address them.

Since the Sarbanes-Oxley Act passed in 2002–and even more so since Eliot Spitzer began investigating contingent commissions paid to brokers–terms such as transparency have become as commonplace in insurers' vocabularies as old, familiar terms such as compliance. A failure to comply used to mean big fines; now, it can mean jail time for public company CEOs. While few carriers call regulatory and compliance challenges their number-one priority, few place it below their top three.