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Standards Keep Pace With Carriers' Needs

Pat Speer May 2007

To those questioning whether standards truly make a difference in our ability to function efficiently in the insurance industry, imagine a world without any. Like a congested intersection without benefit of traffic lights, chaos is bound to ensue.

Agreed-upon standards embody the ultimate in collaboration: technical, personal and political. Their development requires agreement across disparate areas and agendas, yet those hard at work in their creation tend to ebb and flow with the technology requirements of the industry and focus on the promise of a win-win for all involved.

Such is the case for many standards-making bodies, but especially for the Association for Cooperative Research and Development (ACORD), the New York-based not-for-profit insurance data standards association.

Although ACORD has 35 years of work under its belt in the development of efficiency-related standards advancements for insurers, namely in the common classifications used for application and supplemental forms, most of the organization's high-level growth has occurred in the last 10 years.

"We've experienced a lot of organic growth," says Denise Garth, vice president of membership and standards at ACORD. "And we've broadened and deepened our perspective of what standards can do and where that growth is particularly meaningful."

ACORD introduced its ACORD Extensible Markup Language (XML) for Life Insurance standards in 1998 as the industry focused its efforts on top-line growth, and by 2001 "we had XML across all lines of business," Garth says.

After 2001, the market dynamics and associated focus changed from one of grabbing new market share to maintaining existing books of business. Embraced by carriers, agents and vendors, ACORD's standards development rapidly accelerated from forms to e-forms.

FORMS AND OPEN STANDARDS

"We started with paper, and from that built static PDFs," says Ron Dudley ACORD's vice president, forms. Four years later, static PDFs became fillable. And earlier this year, ACORD launched eForms+, a system built on top of IBM's open standards-based technology.

"With the recent launch of E-forms+, efforts are geared toward giving member companies the ability to extract data from these forms, and parse it into individual components," Dudley says.

IBM and ACORD are teaming to enhance the library of ACORD forms to generate XML data, which will be based on ACORD eLabels. Carrier members that implement IBM's software can submit and receive forms electronically, and carriers can extract the XML data and leverage it across back-end systems, adds Dudley.

Among the forms' enhancements, says Dudley, the removal of boxed overflow restrictions is a particularly compelling reason to adopt the new forms.

"In a typical auto application, the form provides boxes for information on four drivers," he says. "What if you have six? The new forms remove box space restrictions, so if a user goes over the visible space allowed, the form automatically expands to accommodate their needs."

The goal is to enable bi-directional work, so if the agent fills out a form and sends it to a carrier or third-party solution provider, they can extract the data, work with it, repopulate the form and send it back.

"This level of functionality wasn't possible a year ago," Dudley says.

STP ON DECK

That accomplishment speaks to one of ACORD's major goals for 2007, says Dudley; namely, continuing standards development efforts within and across domains.

"The ultimate goal is to be able to provide straight-through-processing (STP) of key transactions," he says, "which will reduce the lag time associated with paper exchange and expedite core insurance processes such as policy applications and claims management."

It's a given that XML has become a valuable form of technology for exchanging information with internal and external data partners, but, according to Garth, the path taken by ACORD and its use of XML is broader still.

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