New Working Group Formed to Collaborate on Automation in the Life Insurance Industry
DTCC’s I&RS has been approached by customers to help them leverage the benefits of STP (Straight-Through- Processing) and bring further, much needed automation to the life insurance industry. As part of this effort, the DTCC Life Insurance Working Group was recently created with the support of industry participants, and meets regularly to examine a number of key initiatives such as creating best practices in using the core DTCC product suite for the life space. The Working Group is highly focused on collecting feedback from members across insurance firms, distributors and service providers in order to develop the necessary solutions to automate life insurance processes.
“Our community is always growing,” said Jeanann Smith, Director of Product Management at DTCC I&RS. “It is extremely important to us that we develop close partnerships with key players across the life insurance space. We rely on member feedback to ensure that the solutions we develop are delivering much-needed automation to the market. The Life Insurance Working Group is a reflection of this effort, and is an important vehicle through which we can foster discussion on the most prevalent trends and challenges in the life space.”
The Life Insurance Working Group is primarily comprised of insurance companies and distributors, who meet to examine the existing product lines to create standard usage and best practice documentation in using our products to support the life space. Addressing term, permanent, standalone and traditional long care and disability insurance, the Life Insurance Working Group continues to develop tools for activity reporting, positions and valuations.
A top initiative right now is to diversify the membership within the Life Insurance Working Group. Smith adds, “For us to do the best job possible, we want to ensure we hear from, and work with, the entire life community, such as brokerage general agencies (BGAs) and service providers. The more companies we can add as members, the more touch points we will have within the life insurance transaction cycle. These new members are looking to leverage our existing core products – commissions, positions, license and appointments — expanding the commission hierarchy within a BGA account to allow that hierarchy communication to pass through our core products”.
The distribution members are focused on client facing statements and suitability and oversight functions, as understanding how carriers are reporting transactions is highly important. The Life Insurance Working Group aims to ensure that carrier reporting conforms with suitability requirements.
The Group has developed best practices and robust documentation to buffer existing products and services as part of this initiative. DTCC I&RS sees the annuity space as a benchmark for life insurance products which is a burgeoning market in the insurance industry.
For Smith, DTCC’s past success with other types of products acts as a mandate for what’s coming down the pipeline: “We believe that we have done a great job with straight-through processing of annuity products at DTCC. We also believe that we can do the same for the life space, from initial applications submission through the entire lifecycle, all the way up to death claim processing. The life space is ripe for automation and we aim to bring the same kind of automation to life insurance products as we have for annuities.”
The Life Insurance Working Group meets on a weekly basis to cover current positioning, as well as future priorities and reporting on core products for clients, internal operations, compliance and broker-dealers. Final best practice documentation is due to be completed before Q3 of this year. To learn more about how to participate in the Working Group or to provide your feedback on how DTCC can help bring STP to the life space, please contact your relationship manager or insurance@dtcc.com.