What is a Data Call?
A data call is a request made by an insurance company or regulator to collect specific information from policyholders or insurance providers (NAIC Data Calls). Data calls are used to gather data for analysis, research, rate setting, and regulatory oversight. They provide important information that helps insurers and regulators monitor industry trends, risks, costs and other key metrics.
In the insurance industry, data calls are issued by entities such as state insurance departments, the National Association of Insurance Commissioners (NAIC), and statistical agents or advisory organizations like ISO and NCCI. The requested data typically includes policy and claims information, financial data, catastrophe model results, and other details relevant to insurance operations, products, and pricing (Data call Definition).
The purpose of insurance data calls is to collect up-to-date, comprehensive data for actuarial analysis, research, rate filings, solvency monitoring, fraud detection, and other regulatory and oversight functions. The data allows insurers and regulators to identify trends, risks, and opportunities to support a stable insurance marketplace.
Why Do Insurers Issue Data Calls?
Insurance companies issue data calls to policyholders for several reasons. Primarily, additional information allows insurers to accurately assess risk and determine appropriate premiums and coverage limits (1). When underwriting a new policy, insurers may request medical records, financial data, driving records, and other personal information to properly evaluate the applicant.
After a policy has been issued, insurers require ongoing information from policyholders to monitor any changes that may impact their risk profile. For example, drivers may be asked to provide updated motor vehicle records and homeowners may need to verify that property values or renovations are accurately reflected (2). Data calls help ensure premiums and policy terms continue to align with each insured’s unique circumstances.
During the claims process, detailed documentation is often required to validate losses and determine if they are covered by the policy terms. Medical reports, police records, repair estimates, and other proofs of loss help insurers investigate claims and identify potential fraud (3). Though invasive, data calls protect against inflated or falsified claims.
While frequent information requests can seem burdensome, data calls allow insurers to provide competitively priced policies tailored to each policyholder’s specific needs and risks.
(1) https://www.longtermdisabilitylawyer.com/faq/insurance-company-always-asking-information-need-concerned/
(2) https://brossfrankel.com/2019/05/23/insurance-company-documents/
(3) https://www.linkedin.com/pulse/insurance-companies-ask-too-many-questions-wan-shahrezal
Types of Data Requests
Insurers may request various types of data from policyholders during a data call. Here are some of the main categories:
Personal Information: This includes basic personal details like name, date of birth, address, phone number, email, etc. Insurers need to keep this information up-to-date in their systems.https://www.easysend.io/blog/7-customer-data-types-in-insurance-with-tips-for-collecting-data
Policy Information: Details about the policies held with the insurer, including policy types, coverage limits, premium amounts, etc. This is key for the insurer’s records and underwriting processes.https://www.dig-in.com/opinion/the-four-types-of-insurance-consumer-data
Claims History: Records of any previous claims filed, which helps assess risk levels. Insurers will want current details on any recent claims.https://www.easysend.io/blog/7-customer-data-types-in-insurance-with-tips-for-collecting-data
Frequency of Data Calls
Policyholders can receive data requests or “data calls” from their insurance company at various frequencies throughout their policy period. According to the Association of British Insurers (ABI), some policyholders may only receive a data call upon initial signup or renewal. Others who have more complex policies may receive more frequent requests, such as quarterly or even monthly.
The frequency of data calls can depend on the line of insurance and type of policy. For example, commercial auto insurers may request monthly odometer readings or usage data to properly rate policies, while life insurers may only verify information at renewal. Health insurers may request updated medical records or prescription information regularly to determine ongoing eligibility and premiums.
Overall, there is no set standard for how often insurers can request additional data. Some states may have regulations around allowable frequency. But in general, policyholders should expect to provide additional data to insurers on an occasional basis, with the frequency driven by their specific policy type and the insurer’s data needs.
Examples of Data Called For
Insurance companies may request a wide variety of data through data calls. Some common examples include:
- Financial information – Insurers often request detailed financial statements and reports from companies to assess risk levels. This may include balance sheets, income statements, cash flow statements, and details on assets and liabilities.
- Loss histories – For commercial policies, insurers will want loss run reports going back a number of years. These outline past claims, causes of loss, and total claim amounts paid.
- Medical records – For health and life insurance policies, companies frequently request medical histories, test results, and doctor’s reports to evaluate applicants.
- Vehicle information – Auto insurers ask for VIN numbers, accident and violation histories, and sometimes even inspection reports on vehicles being insured.
- Property details – Home and business insurance applications collect information on building age, size, construction materials, security systems, and more.
- Operations data – Information on business activities, materials handled, machinery used, and employees may be requested to assess risks.
Insurers attempt to collect enough pertinent data through these calls to accurately underwrite policies, classify risks, and set appropriate premiums.
Importance of Responding
It is crucial for policyholders to comply with data requests from insurance companies. Failing to respond can have serious consequences, including denial of coverage. As Treasury’s Federal Insurance Office notes, data calls provide insurers with vital information to assess climate and other risks, set appropriate premiums, and pay claims.
By law, policyholders must cooperate with insurers and provide requested information truthfully and completely. According to the NAIC, data calls are a regulatory tool to monitor solvency, market conduct and more. Without policyholder participation, insurers cannot accurately evaluate policies and claims.
In addition to mandated data calls, insurers may request information to process applications or claims. Failure to respond could lead to processing delays, premium increases, or denial of coverage. Policyholders who do not comply may even face fraud accusations if insurers suspect intentional omission of material facts.
While data calls require time and effort, it is in policyholders’ best interest to provide insurers the information they need. Responding promptly and accurately allows insurers to properly underwrite policies, price coverages fairly, and pay claims for losses suffered.
Consequences of Not Responding
Failing to respond to a data call request from your insurance company can have serious repercussions. The most common consequences include:
- Your claim being denied – If you don’t provide the requested information, the insurer may not have enough details to properly evaluate and process your claim. This could result in a denial of coverage.
- Higher premiums – Declining to cooperate with a data call could cause your rates to increase at renewal time. Insurers view non-responsiveness as higher risk.
- Cancellation of your policy – In some cases, not complying with a data request may be grounds for the insurance company to cancel your policy altogether.
- Litigation – If you ignore a data call, the insurer may have no choice but to file a lawsuit to obtain the information they need. This can result in significant legal expenses.
Essentially, declining to provide information when your insurer requests it can profoundly impact your insurance coverage and relationship with the company. What happens if a policyholder ignores the request largely depends on the specifics of the situation, but the consequences are rarely beneficial for the policyholder.
Protecting Personal Information
Insurers take data security very seriously and employ various measures to keep policyholders’ personal information safe. The NAIC Insurance Data Security Model Law establishes standards for data security that insurers must follow.
Some key ways insurers protect data include:
- Encryption of data in transit and at rest
- Access controls and authentication protocols
- Employee training programs on proper data handling
- Regular risk assessments and audits
- Incident response plans for data breaches
- Secured data centers and backup systems
In addition, insurers are increasingly adopting the NIST Cybersecurity Framework which provides guidelines on identifying, protecting, detecting, responding to, and recovering from cyber attacks. Adhering to industry best practices and regulations helps minimize risks and safeguard policyholders’ sensitive information.
Ultimately, insurers must balance data security with the need to collect relevant information to accurately underwrite policies. But stringent controls and governance helps achieve both objectives in a responsible manner.
Data Call FAQs
Here are some frequently asked questions about data calls in insurance:
What is the purpose of a data call?
Data calls allow insurance regulators to collect information for oversight, monitoring market trends, and enforcing regulations (Florida Office of Insurance Regulation). Data calls provide necessary data to regulate the industry.
How often are data calls issued?
The frequency varies, but data calls are issued at least annually. Some are quarterly or monthly reporting requirements (Florida Office of Insurance Regulation).
What information is requested in a data call?
Requests vary, but often include financial statements, policy and claims data, compensation details, and information on complaints or violations (Florida Land Title Association).
What are the consequences of not responding?
Failure to respond could result in fines, disciplinary action, revocation of license, or other penalties from the insurance regulator (Florida Office of Insurance Regulation).
How is personal information protected?
Regulators must keep data secure and confidential. Any public reporting of aggregated data must protect privacy of insureds (Florida Land Title Association).
Key Takeaways
The key takeaways include:
A data call in insurance refers to the insurer requesting updated information from policyholders to review policies.
Insurers issue data calls to confirm information is accurate and policies reflect current risk profiles.
Common requests include details on drivers, vehicles, property values and claims history.
Data calls typically occur annually or when policies renew, but can happen anytime.
Policyholders are usually obligated to comply with reasonable data requests.
Not responding may lead to policy cancellation or claims being denied.
Insurers must protect any collected personal information according to regulations.
Policyholders should verify requests are valid and ask for help understanding requests if needed.
Providing accurate, timely information helps keep premiums aligned with risk and policies active.