Life Insurers Sinking in Quicksand as Regulators Scrutinize Non-Traditional Consumer Data Sources
And the NAIC is not the only regulator giving life insurers a sinking feeling. As reported in our January 29 client alert, the New York Department of Financial Services (NYDFS) released Circular Letter No. 1 (2019) titled “Use of External Consumer Data and Information Sources in Underwriting for Life Insurance.” Letter No. 1 expresses the NYDFS’ concerns with the use of external data sources and imposes significant burdens on life insurers using external data and algorithmic underwriting.
There is no end to the quagmire in sight as regulators will continue to examine life insurers’ use of non-traditional consumer data sources and algorithmic underwriting, putting life insurer’s use on shaky ground.
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