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Mechanism to Preserve Audit History Record for Insurance Claim using Blockchain Smart Contract

IP.com Disclosure Number: IPCOM000247099D
Publication Date: 2016-Aug-05
Document File: 6 page(s) / 106K

Publishing Venue

The IP.com Prior Art Database

Abstract

Disclosed is a blockchain mechanism that allows insurance companies to efficiently preserve audit history records for claims. The system not only keeps all participants involved in the claim processing up to date during the claim lifecycle, but also ensures and provides evidence of regulatory compliance.

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Mechanism to Preserve Audit History Record for Insurance Claim using Blockchain Smart Contract

In an increasingly competitive insurance market, insurance companies must continually work to achieve greater efficiency and cost effectiveness and maintain compliance to ensure that customers' private/confidential data is secure. For insurance companies, the central issue of information trust remains critical for every service delivered. In addition, enhanced regulations create significant compliance and governance burdens. Thus, insurance companies must preserve the information that is needed as per regulatory requirements, have it available for any electronic discover (e-discovery) obligations, and ensure that all claim lifecycle history is properly preserved and audit records are properly documented.

Currently, maintaining regulatory compliance is a challenge for insurance companies.

Companies need to ensure that policies for claim records management not only exist , but also are enforced. The policy states that the organization intends to:

Comply with applicable regulations Create records to be able to effectively operate

Maintain complete, reliable, accurate records Retain records for designated period of time Destroy records no longer required by the business Suspend the destruction in the event of litigation or pending investigation
Define the responsibility within the organization for records compliance

Policies should be distributed under signature of the senior level executive. In case of litigation, a hold is put on an entire claim file to suspend the retention and disposition. The company needs to show the regulatory body that during this period/specific timeframe, there was no tampering with the records. It can be time based or rule based. In cases of e-discovery and litigation, it is also important to show that documents and data were deleted as per regulatory requirements before e -discovery was issued. The records usually include claim payment history.

Currently, claim related transactions/events are happening in different systems (e.g., policy management, claim management, content management, payment system, etc.). The result is a set of multiple audit records. Having one centralized claim audit history record is a challenge. A method and system are needed to enhance the insurance industry's record-keeping and reporting capabilities as well as its governance structure.

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The proposed mechanism with blockchain usage gives participants the ability to share the contract/claim record that is updated every time a claim-related event occurs. All participants involved in the claim processing are kept up to date during the claim lifecycle.

The novel mechanism allows insurance companies to preserve the evidence of one truthful record existence with a full claim lifecycle history for auditing and compliance purpose, so it can be proved that all transactions, including payments, holds, and...