InView Autumn/Winter 2015

Issue 2 | Autumn/Winter 2015
19
Insurers handle ever greater quantities of personal data in their
day-to-day operations – so it has never been more important to
ensure they have watertight legal compliance systems. The age
of Big Data is upon us.
Effectively protecting personal data is critical to the success
of insurers, self-insureds and intermediaries. As a major asset,
personal data must be safeguarded and utilised properly, in
accordance with strict legal requirements.
The service launched in December 2014 illustrates how data
protection issues can be successfully managed to deliver real
and sustainable benefits for multiple stakeholders.
The revolutionary government-backed scheme was launched by the
Association of British Insurers’ (ABI), Motor Insurers’ Bureau (MIB)
and Driver and Vehicle Licensing Agency (DVLA) to provide the motor
insurance industry with secure access to accurate driving history
information. All data will be routed through the MIB Hub which is
expected to receive, and respond to, tens of millions of requests
every day.
The function of MyLicence – to provide insurers with access to
electronic driving records – threw up a number of legally complex
questions and Weightmans was asked to advise the MIB on data
protection, IT and contractual issues during negotiations, and after
the launch of the system.
MyLicence is about data sharing, as opposed to data flow, which
meant there were numerous legal issues for both the MIB and
DVLA. One of the areas we were involved in related to advising on
how information could be legally shared between the parties, while
complying with the Data Protection Act 1998 (“DPA”).
As a result of the successful resolution of these issues, MyLicence
enables insurers to use the policyholder’s driving licence number
to obtain data that helps to accurately assess risk and prevent fraud
when dealing with new customers or policy renewals. This will
benefit motor insurance providers and law-abiding motorists alike.
The MyLicence initiative was launched in the context of the
government’s commitment to upholding information rights in the
public interest, as well as protecting the privacy of individuals in
respect of their personal data. It also forms part of a series of digital
services exemplar initiatives to remove red-tape and improve the
government services available to the public.
In an increasingly regulated environment, businesses in the
insurance industry must be aware of their obligations under the
DPA, the Privacy and Electronic Communications Regulations 2003
and related legislation.
This is because breaches of the DPA and the other data protection
laws can lead to significant reputational and brand damage for
defaulting organisations. In addition, the financial penalties that
can be levied for breach of the DPA are becoming increasingly
severe – as are a number of other possible negative consequences,
such as major reputational damage.
On top of this, the European Commission has issued new and
extensive legislative proposals regarding the protection of personal
data. These are considerably more detailed and far-reaching than the
current regime. Consequently, they are likely to increase the data
protection compliance obligations of all organisations that collect,
hold and process personal data as part of their operations.
The main data protection issues include: access to and use of
personal data and sensitive personal data; data sharing; data
subject access requests; employment related issues; international
data transfers; notification and general data protection compliance;
privacy policies and compliance with the fair processing’’; personal
data security breaches and notification; privacy and electronic
communication issues; electronic marketing; and rules around
cookies and cookies policies.
Data protection is increasingly central to the activities of business
across the insurance industry. While it is essential to protect your
interests against the risks of regulatory mismanagement, there
are also substantial commercial benefits for forward-thinking
businesses prepared to innovate and develop their approach to data
management. Utilisation of this increasingly valuable asset should
be at the forefront of all business plans within the insurance industry.
Big data is the future, however compliance is key.
The launch of the MyLicence service earlier this
year illustrates how data protection issues can
be successfully managed to deliver real and
sustainable benefits for multiple stakeholders.