MyLicence. Business Process Guide. Version 3.0 July 2014 ABI.ORG.UK. PAGE 1 of 56

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1 MyLicence Business Process Guide Version 3.0 July 2014 PAGE 1 of 56

2 INTRODUCTION Background The MyLicence programme (formerly known as the Insurance Industry Access to Driver Data or IIADD programme) will give insurers access to accurate data from the DVLA on driving entitlements, convictions and penalty points when they are providing quotes for motor insurance policies. The initiative will work by drivers providing their driving licence number (DLN) when they apply for insurance. An automatic check will then be made to the DVLA database, which will return accurate information on licences. The information provided will include endorsement codes, penalty points, the amount of any fines, conviction dates, disqualifications, type of licence held, length of time licence held, and entitlement to drive (i.e. manual/automatic, motorcycle, HGV, etc.). The MyLicence programme is a joint initiative of the DVLA, the Department for Transport and the insurance industry, represented by the Association of British Insurers (ABI) and the Motor Insurers Bureau (MIB). These organisations have been working together for five years to agree the scope of the service. Insurance intermediaries, comparison sites, and other industry bodies have also been involved in these discussions. The process will direct enquiries through an industry hub which will be operated by the Motor Insurers Bureau. This will ensure system stability and ultimately will be able to add additional useful information, such as no claims discount or claims history, to make quote processes even more accurate. Using data provided by the DVLA will remove the opportunity for customers to make mistakes when declaring their licence entitlement and conviction history. During an information match conducted with the DVLA, we found nearly one in five policyholders understated the number of motoring convictions they have; some by accident, others deliberately in order to pay a lower premium. We therefore estimate that under-declaring motoring convictions adds about 15 per policy to the cost of insurance for those motorists who declare their driver data accurately. In addition, a number of motorists mistakenly provide an incorrect date for motoring convictions that have actually expired, meaning they are paying too much for their insurance. These customers will therefore benefit from lower premiums as a result of this initiative. As well as saving honest customers money, it will mean that insurers will need to ask customers fewer questions when they apply for cover, thereby speeding up the purchasing process for everyone. Importantly, by reducing the incidence of negligent misrepresentation and non-disclosure, the initiative will also greatly reduce the number of cases requiring consideration by the Financial Ombudsman. The purpose of this guidance This document codifies the business processes that the insurance industry will need to follow to efficiently access drivers records through the MyLicence service. It sets out mandatory processing requirements, as well as recommended process flows. PAGE 2 of 56

3 It is intended that this document will enable industry stakeholders to understand how their business processes will need to be adapted to make use of the MyLicence service. The document does not cover the technical requirements that will allow the industry to connect to the MIB Hub. That information is available in the Hub Industry Interface Specification published by the MIB, which is available upon request from The document also does not cover the etrading Standards designed to support the MyLicence changes. These can be obtained from Polaris UK Ltd. More detail about how compliance with the processes set out in this document will be monitored is available when firms register for the MyLicence service via the MIB registration tool. Intended audience The guide is aimed at insurers, intermediaries, software houses and comparison websites. Authors of the guidance The guidance has been compiled by the Association of British Insurers (ABI) and the Motor Insurer's Bureau (MIB), in consultation with Polaris UK Ltd (the industry etrading standards body). The principles and processes documented in this guide have been developed following consultation with the DVLA and the Information Commissioner s Office about data protection requirements and consultation with industry representatives about their user requirements. Development, implementation and review of the guidance This document has been available to the insurance industry in draft since early October This is the final version of the guidance before the MyLicence service is launched and has been updated to reflect feedback from the DVLA and the industry. After the launch of the MyLicence service, this document will be reviewed periodically to ensure that the processes codified here remain relevant and appropriate. Format of the guide The guidance is presented in seven chapters. Chapter one considers the new business process with mid-term adjustments covered in chapter two. The renewal process is outlined in chapter three. Chapter four considers retention of data, while chapter five considers visibility of data. Chapter six includes a set of miscellaneous principles not included elsewhere in the document. Chapter seven provides a glossary of terms used throughout the document, and terms included in that glossary are italicised throughout the document. In addition, there is one appendix to the document. The appendix details two case studies to explain the restrictions on using both DVLA and self-declared data (as discussed in section 6.3). The principles set out in the first five chapters of the document are those applicable to those parties that are allowed access to DVLA data; i.e. they have been through the appropriate registration process with the MIB and are authorised to use DVLA data. PAGE 3 of 56

4 Whilst more detail about the registration process is available via the MIB, the general principles for participation are covered in chapter six, as are the implications for those firms that are not participants. Throughout the chapters of the document, we have identified to which parties the process flows are relevant: i.e. insurers, intermediaries, software houses and comparison websites. Association of British Insurers July 2014 PAGE 4 of 56

5 1 NEW BUSINESS PROCESS 1.1 Collection of Information from the Customer Step Process Proposer is shown and agrees to a fair obtaining notice, informing them how their data will be used. Next Step or 1.2.3(1) Applies To Distributors Notes: It is mandatory for fair obtaining notices (FON) to be presented to the customer, and for the customer to explicitly consent to the fair obtaining notice, in advance of any information being requested from the DVLA. It is strongly advised that this information is presented before any data is requested from the customer. Suggested fair obtaining notice clauses have been provided by the MIB and are available on the ABI website. These clauses are appropriate for any distribution channel. The suggested FON wording is to be used in addition to current FONs in place, it is not a replacement and firms may adapt the wording in the fair obtaining notices as they see fit. We recommend seeking independent legal advice prior to use of the fair obtaining notice. Having an appropriate fair obtaining notice will be part of the user agreement between each organisation accessing DVLA data and the MIB. While consent must be explicit, there is no prescribed method of getting that explicit consent (i.e. a tick-box is sufficient but not mandatory). It is optional for an individual to provide their DLN. Therefore, if an individual disagrees with the fair obtaining notice, no data can be requested from the DVLA and the individual should be asked to selfdeclare their information (in which case the next step is 1.2.3(1)). As per the conditions for processing under the Data Protection Act 1998 an individual may withdraw consent. If consent is withdrawn firms must not use the DLN to request additional data from the DVLA using that individual s DLN. Withdrawing consent does not affect the validity of anything already done on the understanding that consent had been PAGE 5 of 56

6 given Proposer provides DLN, full name, date of birth and gender for each driver with a licence from Great Britain (GB). Notes: It is strongly recommended that proposers are encouraged to provide the DLN for themselves and any named drivers if they hold GB licences, by explaining the benefits for them relative to using selfdeclared data , 1.2.3(2) or 1.2.3(3) Distributors The MyLicence service will only provide information on GB licences (note this covers licences from England, Scotland and Wales and excludes licences from Northern Ireland, the Isle of Man, the Channel Islands or any other state). When requesting information about the proposer and any named drivers it will be necessary to first determine if each driver is a GB licence holder and to explain to the proposer what constitutes a GB licence. This may be done via help text, a specific question or any other method deemed suitable by the distributor. It is only necessary to request a DLN from GB licence holders. Non- GB licence holders will need to self-declare their information (as per step 1.2.3(2)). However, it will be beneficial for the industry if the DLNs of Northern Irish licence holders are requested, as it will allow this information to be included in the CUE database. Firms that collect the DLNs of Northern Irish licence holders for this reason will need to obtain consent from their customers. Distributors seeking the DLN of named drivers must ask the proposer to gain the consent of the named driver for the processing before the DLN of the named driver is processed. It will not be mandatory for individuals with a GB licence to declare their DLN in order to request a quote. Where a driver has a GB licence but will not provide their DLN it will be necessary for them to selfdeclare if the quotation process is to continue (as per step 1.2.3(3)). Requests for DVLA data for each driver can only take place once the full name, date of birth, gender and DLN has been provided for that driver. PAGE 6 of 56

7 Distributors can request the full name, date of birth, gender and DLN from the proposer at any point in the application process. The full name, date of birth, gender and DLN of any named drivers can be requested from the proposer at the same time as the proposer or during a subsequent step. DVLA data about named drivers can either be sought from the MIB Hub at the same time as the information about the proposer or during a subsequent step. However, the overall quote process will be fastest if requests for DLN information are made as early in the question set process as possible. Distributors must not pass DVLA data to panel members for processing until the full application form has been completed, the fair obtaining notice has been seen, explicit consent given, and a quote has been requested. Where distributors use a panel of insurers and/or intermediaries it will be necessary for the question set to request both self-declared data and the DLN for each individual until their entire panel is able to process DVLA data Distributor verifies the Driver Licence Number for each GB licence holder that declares a DLN or 1.2.3(4) Distributors Notes: After collecting the full name (including any middle names), date of birth, gender and DLN for each GB licence holder the distributor is required to validate at least the first 11 characters of the DLN (surname, date of birth and gender). If a DLN cannot be validated, the driver record must not be requested from the DVLA. If validation still fails after asking the individual to correct their details the distributor should ask the individual to selfdeclare (as per step 1.2.3(4)). Once the DLN has been validated, the licence data can then be requested from the MIB Hub. A DLN may not validate if the name or gender of the individual has PAGE 7 of 56

8 changed but the DVLA has not yet issued a new driver licence. Therefore, if a customer has not changed either their DLN or personal details after prompting, distributors may want to ask customers to provide their identity details as they appear on their current licence. Alternatively, the distributor could ask for the customer s previous name, and validate the information using the previous name, rather than relying on self-declared data. If the distributor does validate using the previous name supplied, before sending the request to the MIB Hub they should take all reasonable steps to ensure that the DLNs provided belong to the individuals named in the policy. Moreover, they are accepting the increased risk that the policy is based on data relating to a different individual. Also, if an individual has provided a DLN that has not been updated for their new name or gender, the distributor, intermediary or insurer may want to prompt the individual to update their licence with the DVLA. Note that the DLN takes the following format: A B C D GARDN C99 LY A = the first five letters of your surname. If your surname has fewer than five letters, the remaining letters are made up using the number 9. Where a surname has a special character before the fifth character (e.g. a space, apostrophe or hyphen) the character is ignored. In the case of any surnames beginning MAC, such as MacDonald or Mace, the A is removed, converting them to give the surnames MCDON and MCE99. B = the first and last numbers are the year of your birth. The second and third letters are the month of your birth. If you are female, 5 is added to the second digit, with the total being the number used as the second digit. The fourth and fifth digits are the day of the month on which you were born. C = the first two initials of your first names. If you only have one initial, the second character will be a 9. The third character is normally a 9, but is used as a differentiator when required (i.e. when twins have the PAGE 8 of 56

9 same initials). As it is common for individuals to use a different name to their given name (for example someone named William that purchases insurance under the name Bill), firms may limit validation to the first 11 rather than 13 characters. It is recommended that this is only done when validation of the first 13 digits fails and the customer does not change their name or DLN after prompting, to ensure validation remains as strong as possible for identity verification. There are also approximately 11,000 active drivers in Great Britain who do not have a forename as shown on the DVLA database. In this situation each of the first two initials will be replaced with a 9. D = randomly generated check digits that cannot be fully validated by any distributor. Distributors should check that both characters are letters from the standard English alphabet. If the distributor wishes to do so they can automatically populate those characters of the DLN which they can generate from the personal information declared. However, while this may increase the proportion of customers that provide their DLN, and reduce the probability of miskeying, this may result in a higher error rate for DVLA data enquiries, particularly if the individual has not updated their driving licence following a change of name or if the individual does not have a forename. The DLN may also contain a middle initial, which may not have been provided to the insurer Distributor collects the Driver Licence Number for each GB licence holder that declares a DLN and passes the DLN to panel members to request data from MIB Hub Distributors There will be a transition period in the MyLicence programme where some distributors will collect the DLN from customers and pass this panel members to request the data from the MIB hub. It is mandatory for fair obtaining notices to be presented to the customer, and for the customer to explicitly consent to the fair obtaining notice, in advance of any information being requested from the DVLA. Therefore, distributors should obtain consent at the point where the DLN is collected and must follow the process as per step It will be up to Panel members to ensure that the distributor is obtaining the consent and validating the DLN. PAGE 9 of 56

10 Distributors will need to collect the DLN, full name, date of birth and gender for each driver with a GB licence and should follow the process as per step Distributors will need to pass the full set of selfdeclared data and the DLN to panel members in case the DVLA search fails and insurers need to quote using self-declared data. Panel members receiving the DLN from distributors may request the DVLA data only once they have the full name, date of birth, gender and DLN for each driver. The point at which the DLN information is passed down will be for distributors and panel members to determine, but please note that the quote process will be fastest if all records are requested as soon as possible during the question set process. As set above, panel members must not process DVLA data until the full application form has been received, explicit consent given and a quote has been requested. The distributor must also validate the DLN to at least the first 11 characters before sending the DLN to panel members as per step Driver Record is requested from the DVLA Step Process Next Step Applies To Distributor, intermediary or insurer requests data from MIB Hub Notes: Once the distributor has validated each DLN, the DVLA record associated with that DLN can be requested. This will require the distributor or, where the DLN is passed down, panel members to send a request to the MIB Hub Distributors, intermediaries and insurers The request to the MIB Hub can be made by any distributor (i.e. including comparison sites, software houses and intermediaries, not just insurers), which has collected the information from the customer and is an Authorised Third Party. As noted above, when there are named drivers on a policy requests for the proposer's driver record can either be processed in advance of the named drivers' records, or at the same time as the named drivers' records. Note that the overall quote process will be fastest if all records PAGE 10 of 56

11 are requested as soon as possible during the question set process MIB Hub checks cache and then the DVLA, before responding to the distributor Notes: The MIB Hub will first check its cache to see if the information is already available. If it is, the record will be returned immediately to the distributor without a new request being made to the DVLA. If not, the DLN will be sent to the DVLA, and the DVLA will send a response to the MIB Hub which will then be passed to the distributor or panel member where the DLN has been passed down and the call to the MIB Hub is made by the panel member , 1.2.3(5), 1.2.3(6) or 1.2.3(7) MIB Hub For each DLN submitted, there are four potential responses (the message codes are available in the MIB Hub Industry Interface Specification). Note that returned data responses for each DLN submitted to the MIB Hub for a single quotation are completely independent of any others submitted. (1) The driver record is returned as requested; In this case the distributor will receive the DVLA record and the individual will be able to continue with their application process (as per step 1.3.1). Where a record is returned, the DVLA will disclose up to a maximum of 32 offences (with the associated endorsement code, fine, penalty points, disqualification and custodial sentence information) for each individual. Note that data from the DVLA will not be sent in any particular order (i.e. most recent convictions first). Given that many current industry systems register a maximum of five offences per individual, it will be up to firms to adapt their systems to accept more offences, or trading partners will need to agree rules with distributors to decline the risk or refer the risk to a specialist underwriter where convictions exceed their rating rules. To inform decisions about increasing the capacity of systems, data on the average number of penalty points per individual can be found here: PAGE 11 of 56

12 (2) The driver record is not found; In this case, the MIB Hub will return the response Record for supplied DLN cannot be found. This response will most likely occur because the DLN doesn t match a record on the system, either because the DLN has been miskeyed, an error has occurred when automatically generating the DLN or a DLN has been falsely created. In this case, the distributor may prompt the proposer to correct their details and then resubmit the DLN to the MIB Hub. If the request is successful on a subsequent attempt, the application process can continue. If the request is unsuccessful the distributor has a choice of whether to ask the proposer to correct the details again, or self-declare (as per step 1.2.3(5)). Where details are corrected by the proposer, it is necessary for the distributor to validate them once again before submitting the request to the MIB Hub. Alternatively, this may occur because the DLN is legitimate but cannot be found due to processing error. Accordingly, the distributor may want to refer the customer to the DVLA s View Driver Record service, available on the GOV.UK website. (3) The record cannot be released by the DVLA; In this case the MIB Hub will return the response Record for supplied DLN has been suppressed. The record is expected to be suppressed in roughly one per cent of all cases. This is typically due to the record being under maintenance (for example, an address is being changed), and the insurer should not infer anything from this response, other than the need for the individual to self-declare. In this case, the individual will need to self-declare their information (as per step 1.2.3(6)). There is considerable variation in the length of time a record can be suppressed by the DVLA. Accordingly, if a record is suppressed, it is PAGE 12 of 56

13 strongly recommended to proceed with self-declared data, rather than requesting the data from the DVLA at a subsequent point. As individuals may question why their record has not been released distributors may wish to direct the proposer to the DVLA customer portal on the GOV.UK website so that they can view their record themselves. This may spur the individual to follow up directly with the DVLA to understand why their record is suppressed and improve the record return rate from the DVLA database. (4) The request is invalid; In this case, the MIB Hub will return one of several responses indicating that the request is invalid. This would occur if the request cannot be processed due to error at some point, for example if the data sent to the DVLA is incomplete or in an incorrect format (most likely this would indicate that the distributor s validation process has failed). If the request is successful on a subsequent attempt, the application process can continue. If the error persists the distributor can ask the proposer to self-declare (as per step 1.2.3(7)). If details are corrected by the proposer, it is necessary for the distributor to validate them once again before submitting the request to the MIB Hub The distributor asks the individual to self-declare Notes: Given the above, self-declaration could be caused by one of seven factors, each of which is discussed in more detail below: Ends Distributors and software houses (1) The proposer does not agree to (or disagrees with) the fair obtaining notice; If a distributor uses a fair obtaining notice that includes MyLicence, and an individual does not agree to (or disagrees with) that MyLicence specific fair obtaining notice, data must not be requested from the DVLA. PAGE 13 of 56

14 If the fair obtaining notice applies to all data processing that will occur as a result of progressing a quote, the quote process should not continue as per the principles of the Data Protection Act (2) A driver is not a GB licence holder; In this case, the DVLA will not hold information on the individual, so it cannot be provided. Insurers can choose to offer quotes to only those drivers with a GB licence if they can show that they present a lower risk than those without GB licences. (3) A driver will not declare their DLN; There will be instances where an individual will be a GB licence holder, but is unwilling to provide their DLN. It is up to the distributor to decide if the provision of the DLN should be mandatory for GB licence holders. Similarly, it is for each insurer to decide how they will treat GB licence holders who do not declare their DLN. (4) A DLN cannot be validated by the distributor; If validation still fails after asking the individual to correct their details, the distributor should ask the individual to self-declare. If a DLN has not been validated, the driver record must not be requested from the MIB Hub. A DLN may not validate if the name or gender of the individual has changed but the DVLA has not yet issued a new driver licence. Some options for dealing with this scenario are set out in section (5) The driver record is not found; If the MIB Hub returns a response of Record for supplied DLN cannot be found and the proposer has confirmed that the details are correct, then the individual will need to self-declare their information. This response will most likely occur because the DLN doesn t match a record on the system, either because the DLN has been miskeyed or a DLN has been falsely created. PAGE 14 of 56

15 Alternatively, this may occur because the DLN is legitimate but cannot be found due to a processing error. Accordingly, the distributor may want to refer the customer to the DVLA s View Driver Record service, available on the GOV.UK website. (6) The record cannot be released; It is expected that the MIB Hub will respond with Record for supplied DLN has been suppressed in roughly one per cent of cases. This means that the DVLA acknowledges that the DLN exists but is unable to return the information relating to it. Typically, this will be because the information on the record is being updated (for example because the individual has notified the DVLA of a change of address). There is considerable variation in the length of time a record can be suppressed by the DVLA. Accordingly, if a record is suppressed, it is strongly recommended to proceed with self-declared data, rather than requesting the data from the DVLA at a subsequent point. In these cases, the distributor will need to ask the proposer to selfdeclare the information. A response of Record for supplied DLN has been suppressed will, however, at least confirm the identity of the individual (by acknowledging that the DLN does exist). Furthermore, because this is outside the control of the individual it is recommended that the risk is not declined (or premium loaded) on these grounds. As with the case where the DLN does not exist, the distributor may wish to refer the customer to the DVLA s View Driver Record service, available on the GOV.UK website, so that they might understand why the record was not returned. (7) The request is invalid; The DVLA will provide a response indicating the request was invalid if the request cannot be processed due to error at some point. For example, if the data sent to the DVLA is incomplete or in an incorrect format. If the request is successful on a subsequent attempt, the application process can continue. If not, the proposer will need to self-declare. PAGE 15 of 56

16 Again, because this is outside the control of the individual it is recommended that the risk is not declined (or premium loaded) on these grounds. If details are corrected by the proposer, it is necessary for the distributor to validate them once again before submitting the request to the MIB Hub. General Where there is more than one driver on a quotation there will be cases where DVLA data is available for some of the individuals on a policy, but not others. In these cases, it is possible to use DVLA data where it is available, only resorting to self-declared information when necessary. There will be a different response from the MIB Hub to differentiate between a record that has not been found, a record that cannot be released by the DVLA and a request that is invalid. Distributors may wish to set additional responses to allow insurers to identify if selfdeclaration has occurred due to one of the other four scenarios listed also. In general insurers and intermediaries should not rate on the basis of self-declared and DVLA provided data for the same individual. This is because DVLA data is being provided to replace, not verify selfdeclared data. More information on this restriction and the exemptions to it are set out in detail in section 6.3 and the case studies in appendix A. It is strongly recommended that where there is a choice between DVLA data and self-declared data, DVLA data is taken. The intermediary or insurer must be able to identify if the data they are rating on is self-declared or from the DVLA Responses where the DLN has been passed by distributors to panel members to send a request to the MIB Hub Intermediaries and insurers Where the driver record is returned as requested, intermediaries and insurers will be able to provide a quote or decline a risk (as per step 1.3.2). PAGE 16 of 56

17 However, where the driver record cannot be found, cannot be released or the request is invalid, panel members will not be able prompt the individual to correct their details and make another request to the MIB Hub or prompt them to check their details on the DVLA s View Driver Record service. In these situations, we recommend that insurers and intermediaries quote based on self-declared data that has been provided by the distributor. Please note that where intermediaries and insurers quote using selfdeclared data because DVLA data has not been returned, it will not be clear to an individual that their quote is based on self-declared data. Individuals providing their DLN and consenting to their DVLA data being processed may have a reasonable expectation that their quote will be based on DVLA data. In this case, it is acceptable for authorised parties to request DVLA data when completing the sale. However, the authorised party must not set a premium different to what would have been offered if DVLA data was used for the original quotation, or decline cover for an applicant that would have been accepted if DVLA data was used for the original quotation. This is set out in more detail in section Generation of quotations Step Process Next Step Applies To Individual requests a quote and DVLA data is passed to panel members Notes: Distributors and software houses Once the individual has completed the question set and confirmed that their information is correct, the DVLA information can be passed from the distributor to their panel members. In general, where the distributor or software house has collected both self-declared and DVLA data to service all their panel members, both sets of data will be made available, however premiums should be based on either DVLA data or self-declared data. Verification should not take place against both sets. This is because DVLA data is being provided to replace, not verify self-declared data. More information on this restriction and the exemptions to it are set out in detail in section 6.3 and the case studies in appendix A. PAGE 17 of 56

18 It is strongly recommended that where there is a choice between DVLA data and self-declared data, DVLA data is taken. Please note that if DVLA data has not been collected at the point of quote (for example, because the distributor cannot collect it) it is acceptable for an authorised insurer to use DVLA data to request DVLA data when completing the sale, provided the consent has been obtained from the customer Panel members provide a quote or decline the risk Notes: Depending on the information provided to the insurer, there will be one of three responses: or Intermediaries and insurers Decline the risk; The insurer will refuse to provide a quote for the risk. In this case the insurer and/or intermediary will need to purge the DVLA data from their systems as discussed in chapter 4 of this document. Referral of the risk to a specialist underwriter; In such cases, the insurer and/or intermediary will be able to view data from the DVLA as per chapter 5 of this document. In the event that an insurer or intermediary is not successful in attracting the business, they will need to purge the DVLA data as per section 4 of this document. Quote is provided; The insurer or intermediary provides a quote. As above, the insurer must comply with the rules regarding data retention and visibility as per chapters 4 and 5 of this document. Regardless of whether a quote is provided or refused, insurers may retain and use data that is in an anonymised or aggregated form indefinitely for modelling, pricing, actuarial or management information purposes, subject to their compliance with the Data Protection Act Refer to chapter 4 of this document for the rules regarding anonymisation and aggregation. Provided that the fair obtaining notice permits such use and they are an authorised, insurers and intermediaries may use third party providers to help rate and interpret the data, if required. Third party providers can connect directly to the MIB Hub if they have been PAGE 18 of 56

19 directly contracted by an insurer, intermediary or software house to access the MIB Hub on their behalf. However, they may only access and process DVLA data for the purposes defined in that contract. They must not use DVLA data for any purpose other than for providing a quotation. More information on this issue is covered in chapters 4 and 5 of this document. 1.4 Issue of the policy Step Process Successful insurer or intermediary completes the sale Next Step Ends Applies To All Notes: The proposer chooses a preferred provider from those insurers that provide a quote, either directly or following a referral. The successful party must comply with the rules regarding data retention and visibility in accordance with chapters 4 and 5 of this document. After the sale is completed, the successful insurer or intermediary must also advise the proposer if any of the DLNs correspond to an expired licence Unsuccessful insurers and intermediaries delete data once quotations lapse All Notes: Once a quotation lapses without the issue of a policy, the data received from the DVLA (excluding the DLN as it was self-declared) must be deleted by all parties in accordance with chapters 4 and 5 of this document. This does not apply to anonymised or aggregated data. PAGE 19 of 56

20 2 MID-TERM ADJUSTMENT PROCESS 2.1 A new driver is added to the policy Step Process Policyholder requests a new driver is added to the policy Notes: In this situation, the insurer or intermediary would be expected to follow the same process as for a new quotation as set out in chapter 1, but only for the additional driver. Next Step As per chapter 1 Applies To Insurers & intermediaries If the policyholder does not proceed with the addition of the new driver, the insurer or intermediary must delete the data relating to the new driver, as per step of the new business process. Insurers and intermediaries must not refresh data for the policyholder and any existing drivers, as the contract was accepted on the basis of their data as provided at the inception of the policy, except in limited circumstances set out in below. Note, at the point of renewal, the holding insurer and/or intermediary will have an opportunity to refresh conviction data for all drivers on a policy. 2.2 Mid-term adjustments requiring additional entitlements Step Process Next Step Applies To Mid-term adjustment is declined due to the licence status or a lack of entitlement Insurers & intermediaries Notes: A mid-term adjustment (MTA) will fail if the licence status and/or entitlement information received at the policy inception does not allow the proposed mid-term adjustment. For example, this might happen if the policyholder tries to change from PAGE 20 of 56

21 an automatic to a manual vehicle during a mid-term adjustment, when the data received from the DVLA at point of quote indicated that the policyholder or one of the named drivers was restricted to only driving automatic vehicles. Similarly, a policyholder may request a change to a vehicle which requires a different type of licence at the beginning of the policy valid period. In these scenarios, declining the mid-term adjustment or cancelling the policy would be inappropriate if the policyholder, or named driver, concerned has since had the restriction on their driving entitlement lifted. Accordingly, where a MTA has declined in the first instance on the basis of licence status or insufficient entitlement, it is possible to request refreshed DVLA driver information and rerun the quote, as per steps below Driver record is requested from the DVLA Insurers & intermediaries Notes: In this scenario, it will be necessary for the insurer or intermediary handling the MTA to request updated driver records from the DVLA. In this case, the insurer or intermediary should follow steps , as set out for the renewal process. This will see the insurer or intermediary gain processing approval from the proposer and named driver, validate the driving licence number(s) and then request the driver record from the MIB Hub. The MIB Hub will then return a response to the requestor Irrelevant data is removed from the new record Insurers & intermediaries Notes: The mid-term adjustment must only be based on the updated licence status and entitlement information. This is because insurance policies are annual contracts and convictions sustained since the inception of the policy should not be included in rating until the policy is renewed. Therefore, of the new information received from the DVLA, the only data fields that can be used in the mid-term adjustment in this scenario are the licence status and entitlement fields. PAGE 21 of 56

22 2.2.4 Mid-term adjustment is completed Notes: After removing the non-relevant information, the insurer or intermediary can update the record and progress the mid-term adjustment, similar to steps and of the renewals process. Ends Insurers & intermediaries 2.3 Any other mid-term adjustment Step Process Mid-term adjustment is made without refreshing DVLA data Notes: For any other mid-term adjustment a new DVLA enquiry is unnecessary and must not be requested. This is because the insurer will be able to retain the data received from the DVLA when the policy was incepted and convictions sustained since inception should only be relevant at the following renewal. Next Step Ends Applies To Insurers & intermediaries It is not permissible to periodically check the DVLA database to check for disqualifications or newly added convictions. Holding insurers and intermediaries will need to continue to rely on the individual advising them if they have been disqualified, in accordance with any policy condition which might be applicable. If a record needs to be verified at the point of claim, this will continue to be possible via the three-way call system already in place. Given that DVLA data will be available at point of quote in future, it is expected that the need for this service will decrease. To ensure validation of a DLN at renewal is successful, it is strongly recommended that the insurer or intermediary prompt the individual to update their licence when advised of a change of name or gender, and then request they are advised of the revised DLN details when they are available. PAGE 22 of 56

23 3 RENEWAL PROCESS 3.1 Where DVLA data is requested during the renewal process Step Process Next Step Applies To Processing approval is given by the proposer and named drivers Insurers & Notes: intermediaries Insurers and intermediaries issuing renewal invitations have a choice of whether to use data from the DVLA if the policy was not previously based on DVLA data and the DLN is available. Where DVLA data has previously been provided, the holding insurer or intermediary can request refreshed data from the MIB Hub to ensure that decisions are based on accurate data. As with the new business process, any organisation processing DVLA data for the purpose of generating a renewal invitation must have the consent of the proposer before the DLN of the proposer is processed. Similarly, insurers and intermediaries processing the DLN of named drivers at the point of renewal must ask the proposer to gain the consent of the named driver for the processing before the DLN of the named driver is processed. To minimise costs it is strongly recommended that the fair obtaining notice used during the new business process outlined above covers both the original quotation and any subsequent renewals for both the proposer and any named drivers. Where the DLN was received for a policy already in force, insurers and intermediaries must gain approval for the processing of DVLA data for renewal quotations before the DLN is used to request data from the DVLA. Where a DLN is already known and consent hasn t been received, the individual must consent to the processing of the DLN for the purpose of producing a renewal invitation before DVLA data can be used during PAGE 23 of 56

24 the renewal process. Suggested FON wording have been provided by the MIB and are available on the ABI website. These clauses are appropriate for any distribution channel. The suggested FON wording is to be used in addition to current FONs in place, it is not a replacement and firms may amend the fair obtaining notices as they see fit and we recommend seeking independent legal advice prior to use of the fair obtaining notice. Having an appropriate fair obtaining notice will form part of the user agreement between each organisation accessing DVLA data and the MIB. While consent must be explicit, there is no prescribed method of getting that explicit consent (i.e. a tick-box is sufficient but not mandatory). If an individual revokes consent, firms must not use the DLN to request additional data from the DVLA using that individual s DLN. However, it is possible to continue to use data received before consent was revoked, including the DLN itself as per the principles of the Data Protection Act Driver licence number is validated by the insurer or intermediary Insurers & Notes: intermediaries As with the new business process, the insurer or intermediary must validate the DLN before any data is requested from the MIB Hub (as per step 1.1.3). If a DLN cannot be validated, the driver record must not be requested from the MIB Hub. As validation of a DLN that had previously been validated could only fail in this step if the policyholder has advised of a change of their name or gender, it is strongly recommended that the insurer or intermediary prompts the individual to update their licence when advised of such a change, and then request they are advised of the revised DLN details when they are available Driver record is requested from the MIB Hub Insurers PAGE 24 of 56

25 Notes: Once the holding insurer or intermediary has validated each DLN, the DVLA record associated with that DLN can be requested. This will require the insurer or intermediary to send a request directly to the MIB Hub. & Intermediaries At renewal, the request to the MIB Hub can only be made by the holding insurer and/or intermediary, or software houses or other third party providers contracted to act on their behalf. The insurer or intermediary may request records that had been suppressed during the previous quotation or renewal. It is possible to submit policy renewal requests through the Hub s batch renewal file service or web service. More details on the technical requirements are available in the MIB Hub Industry Interface Specification. As well as submitting the DLN, the insurer or intermediary must also submit the postcode of the policyholder to the MIB Hub. This will allow the DVLA to indicate if there is a mismatch between the postcode provided to the distributor and the postcode on the DVLA database. The postcode check will only be undertaken at renewal due to the high volume of speculative quotes at the new business stage. After the renewal is completed, the successful insurer or intermediary should also advise the policyholder if there is mismatch between the postcode provided to the insurer and the postcode on the DVLA s system and/or if any of the DLNs correspond to an expired licence MIB Hub requests data from the DVLA and responds to the insurer or intermediary or MIB Hub Notes: The DLN will be sent to the DVLA, and the DVLA will send a response to the MIB Hub which will then be passed to the insurer or intermediary. For each DLN submitted, there are four potential responses (the response for each DLN is independent and the responses are the same for both the web and batch request services): PAGE 25 of 56

26 (1) The driver record is returned as requested; In this case the insurer or intermediary will receive the DVLA record and the renewal invitation can be generated as per step (2) The driver record is not found; In this case, the MIB Hub will return the response Record for supplied DLN cannot be found. If the record associated with this DLN has not previously been requested, this could happen because the DLN does not match a record on the system, either because the DLN has been miskeyed or a DLN has been falsely created. If the record associated with this DLN had previously been provided from the DVLA this could happen because an individual has changed their name or gender since the DLN was provided and subsequently had their DLN updated. In this situation, the insurer or intermediary will need to base the renewal on the information used previously, as per step In such cases, the insurer is required to remove any convictions which have become spent (the DVLA will provide the indicative rehabilitation date for each conviction). (3) The record cannot be released by the DVLA; In this case the MIB Hub will return the response Record for supplied DLN has been suppressed. The record will be suppressed in roughly one per cent of cases. This is typically due to the record being under maintenance (for example an address is being changed), and the insurer should not infer anything from this response other than the need for the individual to selfdeclare. There is considerable variation in the length of time a record can be suppressed by the DVLA. Accordingly, if a record is suppressed, it is recommended that the insurer or intermediary base the renewal on the information used previously, as per step In such cases, the insurer is required to remove any convictions which have become spent (the DVLA will provide the indicative rehabilitation date for each conviction). It is also recommended that individuals are asked to selfdeclare any subsequent convictions. PAGE 26 of 56

27 (4) The request is invalid; In this case, the MIB Hub will return one of several responses indicating that the request is invalid. This would occur if the request cannot be processed due to error at some point, for example if the data sent to the DVLA is incomplete or in an incorrect format (most likely this would indicate that the distributor s validation process has failed). If the request is successful on a subsequent attempt, the renewal process can continue. If the data cannot be retrieved from the DVLA the insurer or intermediary will need to base the renewal on the information used previously, as per step In such cases, the insurer or intermediary must remove any convictions which have become spent to ensure that they are complying with the Rehabilitation of Offenders Act. The DVLA will provide an indicative rehabilitation date for each offence to aide this process. General Note that where DVLA data cannot be refreshed because of any of the reasons above, the renewal must be based on DVLA data that was received the previous year, with convictions that have since become spent removed. The DVLA will provide an indicative rehabilitation date for each offence to aide this process. The indicative rehabilitation date is the expected date of rehabilitation for the offence under the Rehabilitation of Offenders Act 1974, (as amended), when the offence is considered independently of any future offences that might extend the rehabilitation period, and is based on the age, disqualification period, fine, custodial period and endorsement code information held by the DVLA. Therefore, insurers relying on this indicative date to calculate the rehabilitation period and adjust for subsequent convictions do so at their own risk. Restrictions on visibility of data mean that the customer cannot be asked to confirm that the data the policy is based on remains correct; however the issuing insurer or intermediary can ask the customer to advise of any convictions received since the date of the last data lookup, which the customer can verify on the DVLA s View Driver PAGE 27 of 56

28 Record service Insurer or intermediary generates a renewal invitation Insurers & Notes: intermediaries This step, and all those preceding it, should be completed in line with the timeframes set out for the issuing of renewal invitations, as stipulated in the rules and regulations set out by the Financial Conduct Authority and/or any other relevant body. Depending on the information provided to the insurer, there will be one of three responses: (1) Decline the risk; The insurer or intermediary will refuse to provide a quote for the renewal of the policy. (2) Referral of the risk to a specialist underwriter; In such cases, the underwriter will be able to view data from the DVLA outlined in chapter 5 of this document. (3) Renewal invitation is provided; The insurer or intermediary decides to invite renewal of the policy. At the point the renewal invitation is communicated to the individual, the insurer or intermediary should also advise the customer if there is a mismatch between the postcode the policyholder has provided and the one on their DVLA record or if any of the DLNs denote an expired licence The policyholder accepts or declines the renewal invitation Notes: The policyholder will either accept or decline the renewal quotation, with or without direct contact with the insurer or intermediary. In each case, the insurer and intermediary must comply with the rules on retention and visibility of data as outlined in chapters 4 and 5 of this document. Ends Insurers & Intermediaries PAGE 28 of 56