How new insurance tech streamlines the regulatory process

The lure of convenience offered by insurtech is often tempered by concerns about compliance. Allow us to allay those concerns.

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August 5, 2024

Written by

Benjamin Sperry

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For many within the industry, the lure of convenience offered by insurtech is often tempered by concerns about compliance.

The fear is this: compliance is complicated, and these digital products make things so fast and so easy… so how can they possibly be compliant?

It’s actually quite simple.

Leveraging industry expertise

Firstly, any insurance SaaS worth its salt has a firm compliance foundation. At Bestow, for example, we’ve assembled a robust compliance team and filled our organization with a deep bench of insurance industry expertise.

Built-in compliance up front

The next advantage is the technology itself. A modern technology platform can shift the regulatory burden from its usual location further down the development pipeline (and then ongoing as needed) to a front-loaded position. Translation: regulatory rules and complexities are quite literally built into the foundation of every product from the very beginning, with compliance oversight all along the way.

Legacy systems are inflexible

Another benefit to a modern tech stack is flexibility. Regulations are always changing, and older systems can require lengthy processes for each regulatory change. Some carriers even report spending up to 70% of annual IT budgets on such maintenance.

Tobie Brink, Compliance Director at Bestow, says “in my experience, things as innocuous as a state changing language requirements for certain questions, or verbiage around fraud, can take some carriers months to resolve.”

Patrick Brusnahan of Life Insurance International echoes that sentiment, saying “legacy technology often lacks the flexibility and technical capability to adapt quickly, making it challenging to stay on top of regulatory developments.” Read more at Life Insurance International.

Meanwhile, a platform like Bestow’s builds compliance rules into every product up front. Our flexible framework allows us to handle ongoing regulatory changes in days or weeks.

One thing carriers can all agree on is that deftly navigating the regulatory landscape is critical. The fact is the sooner carriers migrate to newer technology stacks, the quicker they can exponentially reduce the resources it takes to manage that vital piece of insurance product development and maintenance.

Conclusion

Compliance in insurance technology FAQs

How does Bestow ensure compliance in its insurance technology?

At Bestow, insurance and regulatory experts help guide the product development process, so compliance rules are integrated into the technology platform from the very beginning. In short, regulatory oversight is part of the core design. This approach allows carriers to maintain adherence without adding manual, time-consuming checks at later stages.

Why are legacy systems a challenge for compliance?

Legacy systems are often inflexible, making it difficult to adapt quickly to changing regulations. Carriers using older technology may spend up to 70% of their IT budgets just maintaining products, including regulatory adherence. This rigidity can result in months-long delays whenever regulations, such as language requirements or fraud verbiage, are updated.

How does a modern tech stack improve regulatory adaptability?

A modern tech stack, like Bestow’s, allows carriers to implement regulatory updates quickly, often in days or weeks. Compliance rules are built into the cloud-native platform, so changes can be applied without disrupting existing workflows or performing redundant tasks across disparate systems. This unity and flexibility ensures carriers stay current with evolving rules while reducing time and cost associated with manual compliance updates.

Can modern insurance technology reduce compliance costs?

Yes, modern platforms can significantly reduce the resources and time spent managing compliance. By building regulatory oversight into the product from the start and using flexible frameworks, carriers no longer need extensive manual intervention for updates. This approach allows insurers to reallocate IT and operational budgets toward more core work.

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