Standards
ACORD Expands Global Initiative
The road toward global standardization of interoperable insurance messaging took a new turn recently as ACORD and the eEG7, the European standards entity for the insurance industry, combined their initiatives. Since ACORD is a globally supported organization and the eEG7 is the primary insurance standards organization in Europe, this union of forces promises to expedite the development of standard messaging for European private and commercial insurers and reinsurers and American insurance companies covering life, annuity, property/casualty, and reinsurance.
The European group has been established since 1988 and is an offshoot of the United Nations CEFACT initiatives, which developed specifications for international standards. It aims to facilitate communication and administration in commerce and trade. The eEG7 group has focused on private insurance because that area carries the highest number of transactions. ACORD focuses on large commercial and reinsurance for the same reason.
Developing an e-messaging standard is important for the support of e-business applications, according to Henning Jensen, eEG7 promotion working group convenor. We have put information [in the message] about the insurance number, the damage number, the insurance company, the agent, and so on, so the receiver can understand what a sender has sent to him, explains Jensen. We can say that we have established a standard. So far, we have focused on what is called standard messages for the exchange of information within insurance companies.
The specifications for the initiative will be based on ebXML and UN/CEFACT international standards. Lisa Gray
Compliance
Blue Cross Blue Shield of Arizona Fulfills HIPAA Requirements
Blue Cross Blue Shield of Arizona (BCBSAZ) recently formed an agreement with ZixCorp (www.zixit.com) to adopt its ZixVPM secure e-messaging system. The implementation accomplishes two goals for BCBSAZ. The insurer is not only subject to the Health Insurance Portability and Accountability Act of 1996, but is also a CMS (formerly known as the Health Care Financing Administration) contractor, which subjects it to additional security guidelines regarding e-mail security, privacy, and message integrity.
Theres been a lot of risk with sending private information by e-mail, says Gerry Farmer, BCBSAZs chief technologist. Our subscriber base tends to send lots of e-mails with private information, and we havent had a secure way to reply to them. Its been a laborious manual task.
The new application allows BCBSAZs claims department to e-mail information for faster processing, and in the employment, claims, and medical review departments, employees will conduct business via secure e-mail instead of faxes and phone calls. Farmer says the insurer needs to have something in place ahead of the HIPAA regulatory requirement deadline of April 2003 and had already started searching for a solution.
Ironically, he learned of ZixCorp as a bundled perk of his free account with Yahoo. When we started looking for a solution, I actually didnt realize they had implemented their appliance at this point, but we had them do their demos and realized they had extended it with the appliance product. We did our due diligence and found that other companies had similar products, but no one else had the whole package, says Farmer. BCBSAZ will continue to send and receive messages through its existing e-mail client, but messages will be encrypted with ZixVPM. The insurer has also purchased licenses for Zixmail, a secure desktop e-mail encryption solution. Lisa Gray
IT Studies
Life/Health Underwriting Software Survey to Review Risk Assessment
Thomson Management Solutions (www.tmsolutionsinc.com) announced its plans to conduct a comprehensive study of automated risk assessment systems for life and health underwriting this fall. My goal is to speed up new business processing of underwritten policies, says Maria Thomson, Thomsons managing principal. The key to instant issue is expert underwriting software. So we have initiated the study to determine if there is quality software in the market. With regard to vendors, Thomson adds: Vendors need to know what clients think of their software and what the competition offers.
The Automated Risk Assessment Systems Report 2002 will cover software that helps underwrite individual life, health, disability, LTC, and major medical policies. Commercial software from vendors and in-house systems developed by insurers and reinsurers will be included, and vendors and users will be surveyed. Thomson has recruited VFD Consulting Inc., a Ukiah, Calif.-based research firm specializing in the life/health industry, to conduct the survey. The report is scheduled to be published in December. Gregg Greenberg
Start-Ups
No Legacy System, No Conversion, No Culture
Theres a new skyline on the horizon. American Skyline Insurance Co., located in Baltimore, is a new P&C insurer offering standard personal automobile, homeowners, condominium owners, renters, and small business products. Its target market is urban residents.
Referring to itself as essentially a virtual insurance company, American Skylines management team designed the enterprise from a clean sheetno legacy system, no conversions, no culture. Im not sure how many virtual companies are out there. Its a concept thats been around for a long time, but were actually in operation, says Michael Edwards, CIO for American Skyline. Skyline and Cisco Systems (www.cisco.com) teamed up as a result of Ciscos initiative to roll out its AVVID IP technology for the entire insurance industry.
Says Edwards: Organizations typically have two networks, a voice, PBX or telephone system, and an IT system that consists of computers. With Ciscos AVVID technology, weve been able to integrate both networks at the top, which gives voice the capability of traveling over the Internet. Its all Internet based, and you dont have two different networks to maintain. Voice and data work together.
Many companies have been considering the deployment of an IP-based solution but have been reluctant because the technology is not mature. Wed like to think that weve created a model that other companies could piggyback off of, Edwards says. The insurance industry has voluminous, transaction-based operations, and the model we developed could potentially be a model for some of these other companies to follow. Lisa Gray
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