Emirates Insurance Association in conjunction with Gulf Insurance Federation LEGAL & ETHICAL ISSUES InsurTech & Health Insurance Providers 4th Annual Health Insurance Conference 8th & 9th November 2017

Contents Introduction – The Future of Things to Come # Regulatory Impact Pace of Legislation v Speed of Technology Innovation Impact of InsurTech on Consumers & Health Insurance Providers Examples – Cyber Business Interruption & Telemedicine

introduction The Future of Things to Come “InsurTech”

Cybersettle The Future of Things to Come

@scene The Future of Things to Come

Ki The Future of Things to Come

KLAiM The Future of Things to Come

Regulatory Impact Supply-side & Demand-side Impact on insurers’ business models Regulation & Supervision Will need to evolve Achieve the right Balance between policy Holder protection while Keeping momentum of Innovation Change in insurance Value chain e.g. Start-ups

Pace of Legislation v Speed of Technology Innovation Innovation concepts and the legal landscape Big data & Data Analytics – Invest in Preventative measures Artificial Intelligence (AI) – Smart Contracts – Distributed Ledger Technology new legal and liability framework needed Peer-to Peer and On Demand Insurance May disrupt conventional risk pooling common to insurance –put cover out of reach in terms of affordability and result in exclusion of cover Must be role of Regulators to identify this trend and address at Government Levels

Pace of Legislation v Speed of Technology Innovation Innovation concepts and the legal landscape Blockchain – distributed across a network of computers Decentralised Autonomous Organisations (DAOs) – entities that operate through pre coded rules Smart Contracts – Coded instructions which execute on the occurrence of any event working through blockchain Change the Insurance value change?

Pace of Legislation v Speed of Technology Innovation Innovation concepts and the legal landscape Legal & Regulatory Challenges Legal – enforceability of smart contracts Jurisdiction Governing Law Legal Status of database (DAO) Liability of database (DAO) Regulatory – AML, Taxation Compliance & Consumer Protection Solutions – Protected Sell Companies (PCC) Framework Agreements

Impact on Consumers Regulatory Requirements Regulatory Oversight - Risk Carriers are potentially one or more steps removed from the policyholder – Why? - More participants in the insurance value chain – Tech start-ups etc. Regulators will need to reassess their oversight and regulations. Prudential & Capital requirements – may change based on presumption that Technology will reduce average risk – lowering risk premium. Conduct of Business – insurance products reflect the health insurance provider’s objectives and not the consumer – as insurance becomes reducing part of service. New consumer protection laws needed? Data Ownership – Technology will increase data collection and usage – Overall of data protection legislation and transfer rules Consumer Choice – May reduce – more customisation to individual and greater use of data – if not transferred may not offer quote – data transfer legislation needed

Impact on Health Insurance Providers Legal Changes Needed because of the two facts below Societal Changes: ‘Demand Side Disruption’ – How consumers may react to or influence changing insurance landscape Technology: ‘Supply Side Disruption’ – how aspect of the insurance value chain may change Examples: Smart Contracts – ability to facilitate, execute, negotiate perform the agreement in one platform under a network of multiple sites and institutions through an asset data base – Policy Documents and Terms Peer to Peer Insurance – emerging technologies offers substantial benefits for using this model On demand insurance – coverage of risks faced at a certain moment

Cyber Business Interruption Keys Concerns A significant & developing area of risk Insufficient assessments of Cyber security practices for outsourced providers Cloud computing will redefine IT landscape – Global Cloud market is has grown to over £80 billion Legislative Framework – Companies are collecting more data than ever before and legal obligations arise All data controllers are responsible for their outsourced processing under the application of many of the data and privacy laws Do health insurance providers have Cyber risk covered?

Telemedicine Set to change traditional Health Insurance Coverage Telemedicine or ‘Instant Medicine’ Means of evaluating, diagnosing and treating patients from remote locations – potential to revolution healthcare and health insurance coverage from its traditional sense Some of the legal challenges for health insurance providers will be: Consent of policyholder Reliability of technology Managing this new outsourced remote provider Protection of Data

Legal & Ethical Concerns Summary Regulatory laws, supervision and oversight is not yet developed enough to deal with these changes Legislation will need to be implemented quickly to address both Demand Side Disruption and the Supply Side Disruption The insurance value chain may change in terms of new technology entrants and compromise consumer protection and data protection Ethical issues for health insurance providers are whether they embrace technology to reduce claims while increasing premiums to invest in technology at the cost of excluded certain consumer groups