Insurance Schema Changes for the Account Aggregator (AA) Ecosystem
On October 26, 2023, Reserve Bank Information Technology Pvt Ltd (ReBIT) released two distinct insurance schemas for Life Insurance and General Insurance. These schemas depart from the previous approach of utilizing a single schema for both Life and General insurance products.
Under the new schema, revisions have been made to the fields within all three data types – Profile, Summary, and Transaction. Some fields have been introduced, some have been preserved, and others have been omitted.
Life Insurance (LI):
Here’s an overview of the field changes and their corresponding impact on use cases. 48 fields have been removed, and six new fields have been introduced. For more detailed information on each field, please refer to the attached document.
New fields added in LI schema and its impact on the use cases
| New Added Fields | Use Case Affected | |
| Profile | NA | NA |
| Summary | – Assignment Value – Current value – Surrender value – Policy status – Loan status – Exclusions |
Insurance Companies – New fields help assess ‘insurability’ of the customer Lenders – Collateralised status of an insurance is known RIAs – Additional policy-related information enables better risk assessment |
| Transaction | NA | NA |
Fields removed in LI schema and its impact on the use cases
| Removed Fields | Use case affected | |
| Profile | – PAN – Address – Contact details – Nominee details – Rider details |
Insurance companies, Lenders, and RIAs will no longer be able to do data verification and address verifications |
| Summary | – Cover details – Policy details – Moneyback details – Contract clauses |
RIAs- will be impacted in their ability to use policy information for conducting an accurate assessment of the risk cover and financial health of the policyholder- Absence of premium due date does not allow set up of reminders and notifications |
| Transaction | All transaction details are removed. | Insurance Companies, Lenders and RIAs- Premium payment behavior cannot be ascertained, therefore not helping in risk assessment- Rider claim information is not known, affecting health/cover planning by the RIA and rider positioning by insurance companies |
A summary of the implication of each field on the use cases is mentioned below:
Profile information
Fields Retained: Name of the holder
Fields Added: None
Fields Removed: PAN, Address, DOB, Email ID, Landline, Nominee details, Rider details
- On receipt of data, FIUs would conduct a verification by cross-checking the profile details. Without profile information, FIUs will have to create some additional matrix that only uses the holder’s name. This may not be a fool-proof process.
- PAN and DOB will allow robust verification process automation in cases like CKYC check
- Address details are needed as valid address proof. An insurance policy is issued after doing the KYC; address details received via AA could be used as valid address proof.
- Rider information helps to give an overall view of the policy. The absence of rider information impacts the risk/protection assessment by an advisor.
Summary information
Fields Retained: Policy Type, Premium Amount, Premium Frequency, Premium Payment Years, Sum Assured, Tenure Years
Fields Added: Assignment, Current Value, Exclusions, Policy Loan Status, Policy Status, Surrender Value
Fields Removed: Cover details, Maturity details, Policy Details, Moneyback Details, Contract Clauses, Cover Details
- Current Value details will help in PFM cases, wherein knowing the exact current value of the insurance will be an essential data point for retirement planning.
- Policy Status aptly conveys if the policy is currently active or not, which also helps in ascertaining insurability and protection/wealth planning.
- Policy Loan Status is an important data point for lenders to know if a policy is collateralized.
- Assignment status also helps lenders in knowing if a policy is already assigned to some other entity
- Surrender Value provides the value of the insurance, which is helpful in financial planning as well as credit disbursal using insurance as collateral
- Moneyback details are removed. These details were useful to know insurance policy was a source of regular income for the policyholder
- Policy start and end dates are also removed. This is an important information in financial planning
- Premium due date is also removed, thereby not allowing the set-up of premium reminders and ascertaining outgoing cash flow intervals by FIUs
Transaction Information
This data type is completely removed from the schema
- FIUs like lenders and other insurance companies will be unable to ascertain the premium payment behavior and, therefore, do a risk assessment
- Rider claim status is unknown since transaction details are not available
General Insurance (GI)
Like the Life Insurance schema, in the General Insurance schema, some fields are removed, and some have been added. Thirty-three fields are removed, and 23 new fields are added.
New fields added in GI schema and its impact on the use cases
| New Added Fields | Use Case Affected | |
| Profile | NA | NA |
| Summary | – Policy type (Motor and Health) – Policy status – Cover details – Vehicle insurance details |
Insurance companies – The lapsed status of the policy helps in product positioning – No Claim Bonus percentage allows detection of fraudulence and emergence of new use cases RIAs – Policy status helps in advisory |
| Transaction | Retained | Insurance Companies and RIAs – Claim information helps in product positioning and assessment of general |
Fields removed in GI schema and its impact on the use cases
| Field changes | Use case affected | |
| Profile | – PAN – Address – Contact details – Nominee details – Rider details |
Insurance companies, Lenders, and RIAs- Data verification using profile information done by all FIUs once received through AA – Address verification by all FIUs could be done since insurance policies are issues post KYC, so the address on the policy can be used as valid proof |
| Summary | – Cover details – Policy details – Moneyback details – Contract clauses |
RIAs-Since only Motor and Health insurance details are available (other GI policies not included), advisory on general insurance is affected |
| Transaction | Retained | Insurance Companies and RIAs- Claim information helps in product positioning and assessment of general |
Profile information
Fields Retained: Name of the holder
Fields Added: None
Fields Removed: PAN, Address, DOB, Email ID, Landline, Nominee details, Rider details
- Much like Life insurance, in General insurance, the FIUs needed profile information to verify the data received from the FIP. In the absence of any other profile data except the holder’s name, such verification cannot be done with strong logic
- PAN & DOB are not available via AA. Use cases like CKYC verification are impacted
- Address details are important to use AA information as address proof. GI policy is issued post KYC adherence; address information received on Insurance policies could be used as valid address proof
Summary information
Fields Retained: Policy Type, Premium Amount, Premium Frequency, Premium Payment Years, Sum Assured, Tenure Years
Fields Added: Insurance Type, Policy Status, Cover details, Vehicle Insurance details
Fields Removed: Maturity details, Policy Details, Moneyback Details, Contract Clauses, Cover Details
- Moneyback details were not applicable on GI products, therefore removed
- Insurance Type only includes Motor and Health. This limits the range of GI product information that can be made available on the AA framework. Overall assessment of insurance assets and advisory gets impacted
- Policy status is available, which means even lapsed policy information will be made available. Currently, lapsed policy details are unavailable through the existing repositories. This will help product positioning by other insurers and advisory
- The sum Insured field gives access to indemnity-type policies
- UIN of insurance policies helps with verification of Insurance plan
- Extensive details on policy cover help in understanding gaps and inadequacies during advisory
- Vehicle insurance details are a completely new data type that will help insurers with all possible information on the vehicle
- No Claim Bonus (NCB) percentage is also available, which opens up new use cases for fraud reduction
Transaction information
Transaction details remain the same for GI schema (unlike LIC schema)
- Claim information will be available through transaction details.
Conclusion: In sum, these schema changes represent a fundamental shift in the data landscape for the insurance industry, influencing data processing, risk assessment, and product positioning. Stakeholders must adapt to these changes and harness the new data points to enhance their operations and services while addressing the impact on their existing practices.
The advantages lie in introducing new fields that unlock fresh use cases and opportunities for various stakeholders. Discontinuing certain fields, particularly in the profile information category, disrupts existing use cases that rely on this data. To allow the application of these use cases without compromise. regulators should reconsider introducing at least the critical fields back into the schema since data is shared only upon receipt of explicit consent.
Please find the attached document that maps the schema changes.
We thank Sahamati Volunteer Mr. Aakash Agarwal for contributing towards this blog.