This is the legal framework of the technologies applied to Insurance

SEAIDA (Spanish Section of the International Association of Insurance Law) has presented its study book no. 10, entitled ‘Insurance Law and Technology’, a work that analyzes the new legal framework that applied technologies present in the insurance market , reinsurance and pension funds, especially with the era of digitization, robotics, artificial intelligence and blockchain technology.

Professionals from Álvaro Requeijo Abogados, from finReg360, Telefónica actuaries and professors from the Carlos III University of Madrid, the Rovira I Virgili University, the Pontifical Catholic University of Chile, the Paulista Sao Paulo University and the University of Montevideo have collaborated on the work. .

Specific, the document conducts a study on issues such as insurance law in the digital age; the effects of technology and innovation in the insurance sector; digital transformation and its impact on insurance contracting; the digital signer and Big Data in the insurance sector; regulatory sandbox experiences and possible improvements to the Cyber ​​Risk and Insurance Law; the personalization of the premiums or the disintermediation in the distribution derived from the PSD2 and the future PSD3; the impact of artificial intelligence and robotics; cyber insurance; and reflections on the use of Blockchain technology and Smart Contracts, among other topics.

The presentation, which took place at the UNESPA headquarters, was attended by Lucía Bango, head of the Market Conduct Area of ​​the DGSFPwho has spoken about how the first four calls of the financial sandbox have developed. “The Sandbox Law has been approved at a perfect time, since the pandemic has boosted technology, especially in the insurance sector. We have four calls where a total of 30 projects with a high technological component have been admitted. However, the truly innovative aspect of the admitted projects has not been so much the technology on which they rely for their development, but rather the novelty of the product or the business model presented. The projects that we have found in the last calls are more mature and are increasingly better structured”.

In addition, Bango has wanted value this controlled test environment that serves as an access gateway to commercial activity: “We are immersed in an environment of constant change, but with the sandbox we can be closer to the market, carry out the relevant tests, and accompany and promote innovation.”

Digitization and electronicization in the insurance sector

After the presentation of the notebook, the first block of the day has been made up of a discussion table in which they have participated Lazaro Cuesta Barbera (UNESPA); Álvaro Requeijo (Álvaro Requeijo Abogados); Marta García Mandaloniz (UC3M); and Fernando Javier Ravelo Guillén (UC3M), who discussed whether insurance regulations are adapted to the new digital and technological reality and its advances.

Thus, the important changes that digitization has brought and the importance of adapting regulations to this new reality; the figure of the digital signatory in the insurance sector or the introduction of possible changes in insurance law for a better adaptation to digitization. There has also been a debate about which are the advantages and disadvantages of the introduction of robotic systems in the insurance sector.

«There is a constant technological dynamism in the insurance sector, so this evolution requires more adaptation. However, the challenge is not more regulation, but regulatory flexibility in view of the advance of digitization. The automation of processes involves risks, where legal problems can arise. In this sense, the legislator must favor an environment conducive to the development of technology, granting legal certainty at all times”, reflected García Mandaloniz.

For Ravelo Guillén “insurance companies have had to give way to new business models and, in this sense, the implementation of Artificial Intelligence is essential to adapt to new changes. Chatbots are emerging as very useful tools to improve the interaction between company and customer. One of the advantages of this technology is that it will be able to remember the behavior pattern of users, extracting information of great value for insurance companies to offer more personalized products. However, risks will arise such as bias in advice, manipulation or hacking in algorithms or determining who is responsible for the damage that is caused.

Blockchain, Artificial Intelligence, Big Data and Cyber ​​Risk

The second block of the day included the interventions of Álvaro Requeijo Torcal (Álvaro Requeijo Abogados); Javier Aparicio Salom (finReg360); Jorge Ferrer Barreiro (finReg360); and Rubén Nova Rebanales (Telefónica Seguros).

Requeijo Torcal has exposed the Main regulatory problems facing Artificial Intelligence: “If AI continues to be regulated as it is being done so far from a silo perspective, we risk severely limiting its advancement and losing competitiveness.”

Next, Aparicio has analyzed if, from the regulator’s point of view, too much attention is being paid to ethical risks with the use of AI and data: “The issue is enormously complex since, when Europe raises the European digital package, it does so from an ethical perspective and prioritizing at all times the protection of people’s fundamental rights, which in turn slows down development. In this sense, we must reflect on the extent to which it is correct or not for the EU to prohibit certain behaviors that can slow down the advancement of technology”.

For his part, Ferrer has reflected on the new regulation on payment services and blockchainhighlighting that “PSD2 and blockchain are two realities that are boosting the market and that are related to each other much more than it may seem.”

Finally, Nova Rebanales has explained how disruptive technologies are being introduced such as 5G, the internet of things or the blockchain in the sector
insurer.

This work can be downloaded here.