Loss Data Bases

When you report a claim to your insurance company, the data on the claim is almost always put into a database of losses.

Insurance Services Office (ISO) is an organization that shares claims, premium, and coverage information with participating insurance companies.

Here's info on the claim database.

Most commercial insurance policies are issued using ISO forms.  Look at the bottom of your insurance policy forms.  You'll probably find a copyright notice that shows Insurance Services Office.

This clearing house is a good thing for insurance companies, the industry, agents, and insurance buyers.  Frankly, ISO and operations like it are the reason insurance operations are exempt by law from anti-trust laws.

Without the ability for insurance companies to share information, there would be even less standardization than there is now.  Each insurance company would have to have its own policy forms written.  Any similarities in coverage would be subject to an allegation of collusion.  Insurance company expenses would be dramatically increased as each company would have to hire 30 times the number of actuaries to compute loss costs and perhaps hundreds of attorneys to defend policy interpretation lawsuits.

Only large insurers would survive a regulatory climate that did not allow the sharing of insurance information between insurance companies.  Premium costs would rise because of lack of competition and increased operating costs for insurers.

The McCarran-Ferguson Act of 1945 established the antitrust exemption for insurers.  The exemption is vital to the insurance industry and to commerce. (Of course many other industries could benefit from similar exemptions.  That's a topic for another day.)