Insurers face the threefold challenge of conforming to the laws and regulations specific to the states in which they operate, staying ahead of changes to those laws and regulations, and complying with federal laws and regulations that affect them.

In 2009 alone, more than 24,000 state and federal laws or regulations that affect the U.S. insurance industry were changed or created. In the push to meet regulatory requirements, organizations often draft ad hoc hundreds or thousands of policies and procedures. As the regulatory environment grows more complex, technology is a key component in helping insurers effectively manage their policies and procedures and reduce their compliance risk.

Fragmented policies and procedures management can lead to problems such as overlapping and conflicting documents, weak accountability, haphazard communication and general confusion among employees. It can also lead to problems in regulatory examinations. As of January 2010, the National Association of Insurance Commissioners' examination standards state that exams should be performed with a focus on risk management, and policy review is a central component of that examination process.