Insurance department to analyze blockchain use on assessing uninsured motorist

BISMARCK, ND – The North Dakota Insurance Department (NDID), in conjunction with the North Dakota Department of Transportation (NDDOT), is conducting a proof-of-concept ("POC") leveraging blockchain technology to identify uninsured drivers.

NDID has selected AAIS (American Association of Insurance Services) and the openIDL open-source Linux Foundation Project to conduct the POC and identify uninsured drivers in the state.

Recent estimates from 2019 estimate that roughly 13% of vehicles in North Dakota are being driven by uninsured drivers. These estimates are thought to be extremely inaccurate since they are derived from known uninsured claims and so do not account for any uninsured property damage claims or small claims resulting in covered claims by no-fault coverage.

NDID is working towards reducing the uninsured motorist issue in the state but must first have a more accurate assessment of the problem. NDID is seeking to leverage blockchain technology to more efficiently and effectively collect the information needed while maintaining the utmost privacy and security of data assembled. Blockchain technology is used as a highly secure digital ledger.

NDID is conducting a POC to correlate data from databases maintained by NDDOT as well as personal line auto carriers to compare the number of registered vehicle identification numbers (VINs) to insured VINs. To assist with this POC, NDID has commissioned AAIS, the national Member-focused advisory organization, and openIDL, the open-source Hyperledger blockchain platform run by The Linux Foundation.

NDID is working with auto insurance companies to enhance the data available for this POC.

"We are excited to be working to find solutions to a problem in North Dakota," said Insurance Commissioner Jon Godfread. "Working with the openIDL blockchain platform and AAIS will help us see if this technology can help solve the issue through accurate, timely and verifiable information."

"We applaud Commissioner Godfread on his vision and initiative," said Ed Kelly, President and CEO of AAIS. "We believe openIDL can streamline regulatory reporting and deliver unprecedented insights, while still protecting the proprietary nature of carrier-sourced data. Ultimately, we aim to foster more productive collaborations between carriers and regulators to support product development and a healthy insurance market."