Settlement Processing for InsuranceSM (STL) replaces slow and costly settlement processes with a streamlined, automated tool that brings unmatched value to clients and the insurance industry.
Clients of STL gain an edge with faster settlement of funds, fewer rejects and lower costs – directly contributing to an enhanced financial advisor and end-customer experience. STL offers the following:
Settlement for Withdrawals and Settlement for Premiums:
STL fully automates the movement of money in annuity withdrawals and the payment of life insurance premiums. It streamlines the settlement process between carriers and their customers’ brokerage accounts, reducing manual processes that previously involved the mailing of physical checks. Instead, with STL, funds withdrawn from annuities are issued directly back to the end-client’s brokerage account, enabling distributors to retain funds under their management. Supporting the processing of life insurance premiums, STL systematically transfers withdrawn funds from the brokerage account to the carrier.
Settlement for Replacements:
STL brings DTCC’s robust carrier-to-distributor settlement capabilities to carrier-to-carrier replacement transactions (also known as 1035 Exchanges). This unique offering in the insurance marketplace connects insurance carriers, expediting the movement of monies between ceding (delivering) and receiving carriers upon surrender of an annuity contract in a completely standardized and automated environment.
Market participants that do not take advantage of STL rely on manual processing for individually transferring insurance funds between carriers and between carriers and contra-side brokerage accounts. This manual process increases the risks of misrouted money and inefficiently applied resources via administration of paper checks and reliance on mail and wire services for delivery.
With an expected exponential increase in withdrawals expected due to rising numbers of baby boomer retirees, there is an even greater need to employ faster and safer means of coordinating transactions via STL, including:
- movement of life premiums
- replacements settlement
- systematic withdrawals
- full and partial surrenders
- mandatory distributions