Regulating for Responsible Data Innovation: The Role of Insurance Regulators in Dealing with Risks Relating to Consumer Data Protection and Privacy

Data innovation is challenging the traditional role of insurance regulators. Two major dilemmas emerge that insurance regulators and all financial sector regulators face when confronted with how to regulate consumer data:

1. They must strike a delicate balance to achieve positive consumer outcomes, by both enabling data-driven innovation but still protecting consumers from the risks that arise.
2. They must protect consumers within their sector from the risks that arise even though they do not have sole regulatory oversight over the collection, storage and use of consumer data, which cuts across society.

This study considers each of these dilemmas and explores the options available to regulators to achieve their objectives given these challenges. The report identifies key considerations for insurance regulators to enable responsible data innovation in their markets. It discusses the main benefits and risks of data to consumers and provides a framework to help insurance regulators calibrate their response to the increasing collection, storage and use of data, tailored to their context.