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Straight-through Processing NAVA’s Standards Initiative

Straight-through Processing NAVA’s Standards Initiative. STP – An Industry-wide Update Nov 12, 2008 ESRA Conference. Project Director for NAVA’s Straight-Through Processing Initiative. Tony Deakins Managing Director Abraham, M c Donald & Associates, Inc Office: (904) 808-8328

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Straight-through Processing NAVA’s Standards Initiative

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  1. Straight-through ProcessingNAVA’s Standards Initiative STP – An Industry-wide Update Nov 12, 2008 ESRA Conference

  2. Project Director for NAVA’s Straight-Through Processing Initiative Tony Deakins Managing Director Abraham, McDonald & Associates, Inc Office: (904) 808-8328 Cell: (904) 910-1614 Fax: (904) 212-2101 Email: tdeakins@amcanet.com

  3. Agenda • The Industry Initiative • Technology Considerations • Benefits

  4. Straight-through ProcessingNAVA’s Standards Initiative The Industry Initiative

  5. The Problem • No ability to meet anticipated demand for annuities with current paper-intensive business process • Compliance with differing regulatory requirements • Differing company interpretations of the same regulatory requirement • Consumer expectations for greater service • Need for technology solutions • To meet legal & compliance obligations • To address interoperability • To allow for modular implementation

  6. The Mission “To create a set of standards establishing a common process for doing electronic new business submission for annuities that includes e-signature and standard interpretations of all state and federal regulations – for which we get regulatory acceptance.”

  7. AEGON AIG/SunAmerica/VALIC Allianz Life AXA Financial Edward Jones Fidelity Investments Genworth Financial Guardian Life Hartford Life ING US Financial Jackson National Janney Montgomery Scott John Hancock Financial Lincoln Financial LPL Financial Services MassMutual Merrill Lynch MetLife Morgan Stanley National Financial Nationwide Financial New York Life Pacific Life Pershing Principal Financial Prudential Financial Raymond James RBC Dain Rauscher RiverSource Sun Life Financial TIAA-CREF UBS Financial Wachovia Securities Industry Commitment

  8. NAVA STANDARDS INITIATIVE Technology Considerations What are the key tools & assumptions?

  9. Critical Technologies • eCommerce functions centered on: • Engaging the customer electronically • Business process automation for transaction processing • Compliance through Transparency • Electronic documents • Electronic signatures • Electronic records management

  10. Statutes & Regulations UETA (Uniform Electronic Transactions Act) and ESIGN (Electronic Signatures In Global and National Commerce Act) Permits electronic transactions if agreed to Permits e-delivery Permits e-signatures Permits e-records All state replacement regulations satisfied All suitability regulations met/exceeded All disclosure requirements satisfied 10

  11. End State Vision • Significantly increased sales volumes • Without increased human intervention • Significantly reduced compliance risks • Through use of rigorous business rules and checkpoints • Greatly enhanced customer experience • Simplified buying process • Increased assurance of having made the right decision, selected the right product • Greater transparency • Improved responsiveness to regulators

  12. NAVA STANDARDS INITIATIVE SUMMARY OF BENEFITS

  13. Consumer Benefits Making it less complicated – simplify process Making it easier to understand – transparency Removing frustration– fewer errors, less time & lesscost related to repairing customer confidence Obtain higher level of service 13

  14. Regulator Benefits • Provides tools to facilitate more suitable sales to the consumer & more robust market conduct examinations • Includes robust records management with ability to easily search and find in a single location • Resolves regulators’ current concern – obtain signature at point of sale vs. back-end

  15. Industry Benefits Common process to simplify selling and enhance the attractionof annuities Standards create common language – interoperability between trading partners Electronic transaction reduce costs – fewer errors, E-Delivery 15

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