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ComplianceNovember 08, 2022

Using an Authoritative Source Library (ASL) to connect regulatory change to your compliance program

By: SK KaranamChelsey Hartzell

Insurance companies are transforming. Over the past few years, insurance carriers have demonstrated remarkable flexibility in overcoming several obstacles - the pandemic, geopolitical conflicts, economic fallout, and the impacts of weather-related disasters. Through strategic investments, technological innovation, and business pivots, insurance companies are effectively absorbing the impact of these events.

Despite navigating all of this, there’s no time for insurance companies or those companies that provide insurance products to be satisfied with the adaptations they’ve made thus far. Significant challenges are coming in 2023 and beyond centered around customer expectations, business transformation, diversification, and preparing for emerging threats.

Most importantly, compliance is no longer viewed as an isolated function. Instead, it’s elevated to a strategic enabler for the insurance business. To succeed in such an uncertain business environment, compliance departments will need a new operating framework that can move them from reactive to proactive.

Managing mounting stakeholder demands

Compliance departments face external and internal pressures today, and more than ad hoc measures are needed to satisfy or address growing stakeholder demands.

Internal pressures typically involve fielding requests from other departments seeking information and guidance. Externally, the pressures that compliance departments face come from regulators, investors, and customers, as well as new business priorities, including Environmental, Social and Governance (ESG), diversity, equity, and inclusion initiatives, consumer privacy, and cybersecurity considerations. Whether internal or external, compliance departments are accountable, and if issues aren’t handled properly, it could impact the organization’s reputation and bottom line.

As a result, insurance companies need a framework to help manage the chaos and drive more accountability within the front lines of the business. That’s where an Authoritative Source Library (ASL) comes in.

Greater insights into your compliance program

Insurers today are in a tough spot. The high demand for resources to handle the volume and complexity of regulatory changes is extreme. Additionally, the need to evaluate if, how, where, and when these changes should be implemented can pose significant challenges for even the most experienced compliance staff.

Any significant law or legal citation section can have several potential connection points. Wolters Kluwer created NILS™ Feed Authoritative Source Library (ASL) to give insurers greater insights into their compliance program, whether it’s being able to effectively communicate loss to responsible individuals or linking external product filings to a specific law or citation. ASL creates the bridge for the compliance department to drive toward a holistic view of the entire compliance program.

It’s crucial to have a sound and resilient compliance program. How can you demonstrate to a regulator that you're staying on top of regulatory change? NILS™ Feed ASL gives insurers the unique ability to map activities in their Governance, Risk and Compliance (GRC) system to the relevant statutes and regulatory citations, driving greater insights into how each element of their regulatory program impacts other parts. When changes to an ASL are mapped, they can be seen across all activities, processes, and risks for a true impact assessment.

Controls must be tested periodically based on multiple requirements. The ASL is connected to external complaints that you receive from various sources. As these complaints are handled, and if they are linked back to your ASL, you will understand which regulation receives more complaints compared to those that are more effectively managed. This information allows you to go back and recalibrate your risk framework or implement additional controls to avoid those complaints in the future.

And when you go through a particular exam with a regulator, the findings that arise from that exam can be linked to the corresponding authoritative sources, giving you the context in terms of how you’ve addressed those findings, such as a final response or supervisory letter to regulators. Ultimately, with ASL inside a workflow system, compliance officers are more effective at delegating accountability and creating a more robust and resilient compliance program.

The benefits of ASL

An Authoritative Source Library provides enhanced insight and organizational context for your compliance program through a structured inventory, connected content, and impact on your compliance program.

Structured inventory. The inventory of rules and citations builds from NILS™ INsource and connects to the NILS regulatory update feed to give insurers a robust regulatory foundation.

Connected content. This is where the power and lift from the ASL come in. Unique knowledge connections provide an enterprise-wide view into how one regulatory requirement, event, or activity is connected to or impacted by another.

Compliance program impact. The authoritative source library gives you a single repository of the rules and citations across all the states that you conduct business in. Insurers can expect an ASL to allow them to have a line of sight across their organizations to pinpoint areas of exposure and ultimately allow them to ensure resources are available for high-risk areas.

What value can an ASL bring to your GRC operations? Watch our webinar to learn how NILS™ Feed ASL helps compliance professionals drive insights and efficiencies into their regulatory change and compliance programs.

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