How a Leading Insurer Leveraged Data Quality to Ensure Regulatory Compliance

Mitigating Compliance Risk

This insurer was undergoing a core system transformation as they migrated from a mainframe infrastructure to distributed systems, a process that presented both opportunities and challenges. The insurer had successfully established automated quality and financial reconciliation rules at strategic points across their mainframe, but the transition to distributed systems was raising red flags for potential compliance violations such as premium inaccuracies in the general ledger. These data quality and internal control issues stemmed from a lack of data governance and a reliance on manual controls within existing distributed systems, a process that was prone to errors and potentially concealed compliance issues. If these problems resulted in inaccurate or delayed regulatory reporting on financial data, the company was exposed to significant financial and reputational risk.

As a publicly held company, the insurer is subject to Sarbanes-Oxley (SOX), which requires that companies set up and maintain extensive internal controls for financial and accounting measures, faster reporting and stronger security.  The National Association of Insurance Commissioners’ Model Audit Rule (NAIC MAR) is closely related to SOX, and subjects insurers to regular financial audit and reporting requirements.  Together, these regulations require that companies set up uniform enterprise financial controls and processes and ongoing reporting to ensure financial and accounting data is accurate and auditable.

To minimize these compliance risks, the company needed an automated solution to:

• Routinely monitor the balancing of transfers within a single application
• Routinely monitor the balancing of transfers between systems (“interface balancing”)
• Perform financial account balancing to reconcile systems
• Expand existing mainframe internal controls and quality rules to all distributed systems

Read more about this insurer who implemented Data360 quality rules in their systems with resounding success.