Registered broker/dealers that create and sell non-insurance retirement and other benefit programs, through distributing broker-dealers, can now be supported by Insurance Services.

An SEC rule filing submitted by DTCC's subsidiary, National Securities Clearing Corporation (NSCC), paves the way for broker/dealers to leverage Insurance Services to automate processing and support the administrative handling of these wrap-like non-insurance retirement and other benefit programs. These tailored retirement products will grow as the baby boomer generation enters retirement.

These wrap-like programs are similar to annuities in that they allow for retirement investing based on the bundling of multiple investment options, typically mutual funds. The programs are considered non-insurance because the programs are not themselves insurance products nor are they governed by state insurance regulations.

The rule filing, which became effective December 13, 2006, allows broker/dealers to offer their own retirement programs to plan sponsors through distributing intermediaries. These broker/dealers can now qualify as direct NSCC insurance carrier/retirement services members. Previously, only insurance carriers could qualify for this type of membership.

The rule filing also expands the types of products Insurance Services can process to include non-insurance retirement and other benefit plan products. Until now, Insurance Services has provided services for the annuity and life insurance markets. This new IS service complements the functionality offered on NSCC's Fund/SERV® system, which the program broker/dealers can use for communication to the mutual funds that are in the program's underlying investments.

"With 78 million baby boomers entering retirement in the next few years, there will be a huge transition from the accumulation stage to the distribution and payout stage, which opens the door for a wide range of new retirement products," said John Ziambras, DTCC Managing Director, Insurance Services. "We believe our services are well positioned to support this new market, in the same way we have supported annuities and life insurance through operational and cost efficiencies, reduced risk, and a simpler way of doing business."

Broker/dealers and other entities offering these programs will be able to leverage a number of key Insurance Services' reporting solutions, including Commissions, Positions and Financial Activity Reporting.

"With this change, we can now expand the reach of our services to more customers and have them rely on DTCC Insurance Services to automate and standardize information exchange for retirement programs," said Jeanann Smith, DTCC senior relationship manager, Insurance Services.