Burden of Proof

EXCERPTS FROM THE ARTICLE

Ask O.J.: It’s not what you’ve done, but whether you can prove it that counts. And when the subject is regulatory compliance, the government assumes you’re guilty until you convince it otherwise. Every year (in most cases), you have to prove to the board, committee, or regulatory body that you’re doing the job.

Oh, and if you can’t prove it, the fines can be steep-and that’s after you and your IT staff have spent untold hours accumulating the data from who knows how many legacy systems into a coherent defense.

Are your agents properly licensed? Are your investments properly covered? Imagine trying to collate all this information in the days before computers.

Rules are nothing new to the insurance industry, which is used to them changing seemingly at the whimsy of state and federal officials. But companies are learning to look at packages designed to help make the regulatory reporting as easy as pressing a button. ....

We looked at Axiom’s ControllerView, a package that claims to do that. It works like a data warehouse, pulling information from the claims, policy-management, or other system. This ensures the data are the same for all applications and that no mistakes exist between the compliance data and the operational data used to calculate sales and policy costs. We also looked at “rolling your own” by creating an in-house application to handle your reporting requirements.

Axiom Software Laboratories: ControllerView®

Axiom Software Labs started life ten years ago as a data management consulting firm. The company's initial release of ControllerView came in 1993 after it noticed some trends in decision-support software. “Because of the various sources, physical systems, and locations, it’s difficult to reconcile information back to the source of reporting,” says Tom Tsoir, vice president of strategic relationships for Axiom.

Axiom saw the problem as two-fold. One was the need to pull the data from disparate systems and locations into a single data repository. The other was the need to synthesize that information into reports whose formats have been dictated by any number of state agencies. According to Alex Tsigutkin, CEO of Axiom Software Labs, “In banking, federal requirements are the most vigorous. With insurance, the state level requirements can be quite intense.” And, he adds, “Globalization just adds more complexity.”

To help with this, Axiom created ControllerView, a visual object-oriented tool. The application was developed with a Java front end, object-oriented C++ code, and middleware communications between its various parts. Knowing that there are a lot of back-end systems out there, the company built ControllerView to support multiple communications methods. “We went from the most primitive, the simple extract,” says Tsigutkin. “We also allowed for links to source databases using ODBC links and gateways for the non-RDBMS.”

The emphasis was on creating valuable decision-support tools against core business transactions. In the process, it included the other commercial activities of the company, market-related data (stock market quotes and interest rates), and customer data (for the ubiquitous CRM solution).

Once the data are in place, Axiom’s application can be used for many different purposes; the data can be used for other reports as well, like home-office reporting on sales and replacement policies and asset management of net premiums. All these can be easily extracted from the same data.

And after the reports are done, Axiom lets you find out where the information came from. Using OLAP-like technology, ControllerView can drill down into the regulatory data to determine how and where the aggregated information was calculated. That means that ‘surprising’ results can be traced back to the source of the problem. And it can interface with ledger and ERP systems such as SAP and PeopleSoft, according to Tsigutkin.

Axiom plans to add some new Internet-based electronic banking transactions in the next few months, as well as starting to push its presence in Europe and Asia. "We're adding new country regulations for Japan, the U.K., Singapore, and Hong Kong," Tsigutkin said...

-- By Jeffrey Marks

Reprinted with the permission of Technology Decisions, a Publication of The National Underwriter