By definition, data standards are a set of rules and guidelines that provide a common framework for communication. Much like the human body, this common framework, or skeleton, needs to be supported by something that has the ability to pump information out to its various parts and provide life support to the body as it grows.
At the heart of ACORDs Life Standards Program is the ACORD Life Data Model, and it has, by its nature, allowed for data exchange in the life insurance industry to become stronger as it grows into different phases of its life.
If you think of the Standards Program as a living body and the data model as its heart, you can see how the Life Standards Program has been able to grow from a desktop integration standard into the world of XML (eXtensible Markup Language) that enables data sharing across multiple platforms. ACORD XML is the electronic language of the insurance Internet, facilitating real-time, cross-platform, peer-to-peer communication created as a result of the industrys need for a more efficient means of doing business. The data model has made this evolution much simpler than it would have been if starting from scratch.
The data model was originally created using a data object hierarchy. In simpler terms, the data objects are products that consist of all aspects of traditional life insurance (e.g. term, whole life, variable products) as well as annuities, disability, health, long term care, investments (e.g. mutual funds, stocks and bonds) and so on. Today it is following the same hierarchy and has continued to function efficiently for a wide array of end-users.
The ACORD Life Standards Program began in the early 1990s as the OLifE Program, which used a data model to support its functions. The OLifE standards and early life data model defined the middleware pieces needed to allow applications used in a life agents desktop system to share data. OLifE was developed to provide the framework for “intra” system information sharing between applications running on a single computer or local network.
ACORD XML for Life Insurance built on this early work to expand its focus on cross-system information sharing, meaning that data entered into one application is accessible by all other applications from within and between organizations.
The purpose of the Life Data Model, in both cases, is to allow for the sharing and communication of information. Beyond XML, future languages will be able to reuse the Life Data Model. Its reusability is seen in the evolution from intra-system to widespread sharing of data. This capability is often referred to as Life Standards technology and platform neutrality.
The Life Data Model has been successful in growing the Standards Program for four key reasons: it is reusable, consistent, expandable and interoperable.
As an industry-built and industry-maintained vocabulary of insurance specific domain information, the Life Data Model provides a structured, organized and defined means of sharing complex insurance information among all parties in the industry. This, too, will stay a factor as the industry grows and its counterparts adapt to changes in the business environment.
It is important to keep a keen eye on the future when modeling the data for today. Efforts to do so will allow standards users/developers to easily “plug in” new data requirements to the data hierarchy, expanding on previous achievements rather than breaking and starting over. Standards developers will be able to support critical functions like backward compatibility and interoperability as they move forward to meet the newest needs of the industry.
Keeping the data model intact is critical to achieving interoperability within the life insurance industry. Back office systems that process transactions and send data feeds forth and back to users can use the ACORD Life Data Model. This provides interoperability between the components that make up the enterprise, ensuring that all the pieces fit together.
And you can use the ACORD Life Data Model as the basic business vocabulary for sharing life insurance information between all trading partners. This consistency of meaning as well as structure of life insurance data provides enormous cost benefits, speed to market, and improvement in time and information efficiencieswhich only increases as the number of systems and trading partners increases.
To be successful, the Life Standards are built around the three Ps: products, participants and processes.
The products scope of the Life Standards includes all mortality and morbidity products including traditional life, term, whole life, UL, variable, annuities, long term care and disability income products. This allows a single view of all products, providing reusability, consistency and clarity in sharing information.
These products would be useless unless each link, or participant, in the insurance value chain was able to use them. The participants in this case include agents, distributors, carriers, reinsurers, third parties, vendors and regulators. Fortunately, each of these groups of participants is represented and is actively involved in the ACORD Life Standards Program today, paving the way to a more streamlined business environment.
However, implementation of standards needs to grow. Until people start to move away from using disparate systems and open up their channels to provide complete sharing of data, the industry will have a difficult time moving forward.
Today, over 850 participants across 10 Life Working Groups are actively expanding the Life Standards Data Model and Business Message inventory. Most recently, the Life Standards Program issued the Release Candidate (known as the version 2.7.90) for the Version 2.8 Life Specification.
The Release Candidate includes all approved enhancements to the Life Standards resulting from the November 2002 Subcommittee and represents nearly a 20 percent increase in functionality. The Life Specification now encompasses 76 messages and 44 sub-transactions for a total of 120 business messages. Through these additions, the Life Data Model has been enriched with approximately 40 new objects, 280 properties, 50 new tables and 500 table values.
The publication of the Release Candidate allows members to test and validate the new business messages approved in November over the course of the next four months. The Life Steering Committee is expected to approve the Release candidate at the June 2003 Subcommittee Meeting, at which point it will be known as the Version 2.8 Life Specification. Release Candidate version 2.7.90 is available on the Members’ Only Life Standards Download section of the ACORD Web site.
Active partnerships with industry trade groups and associations explain part of the success of standards and the ability to get the message of their importance out to the appropriate participants. By leveraging the ACORD Life Standards and actively participating in the Life Standards Program, associations are keeping their constituents ahead of the game.
Business experts from partner associations and members are developing–with ACORD–nearly a dozen Implementation Guides detailing business processes and messages with well-defined workflows, message definitions and sample messages. The objective is to build industry standard “Model Messages,” enabling everyone to coalesce on a consistent set of data for cross-industry communication.
The most recent example of this is the Product Profile for Annuities (PPfA) developed in cooperation with the National Association of Variable Annuities (NAVA). The PPfA is the latest addition to the ACORD XML for Life Insurance data standards and has recently been implemented by several carriers and solution providers to facilitate and speed up the carriers ability to provide accurate and timely product information to its trading partners.
With products and participants in place, the next item necessary to have an effective standards program is a defined business process. This simply means defining business messages, using the data model to define the data that needs to be passed between systems or trading partners, in order to accomplish a specific task, like new business submission.
With a rich, robust and truly encompassing data model representing insurance products, participants and processes being implemented by a diverse and representative community of users, ACORD has its finger on the pulse of the Life Insurance industrys method of data transactions.
is program manager, life standards, for ACORD based in Pearl River, N.Y.
Reproduced from National Underwriter Edition, May 19, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.