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November 2008 Tim Meyer

Merrill Lynch Annuity Straight Through Processing E-Signature Process. November 2008 Tim Meyer. Business Case. Increase capabilities for Annuity processing throughput Annuity Sales $300-$600 million a month 500-1000 Annuity Applications a week

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November 2008 Tim Meyer

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  1. Merrill Lynch Annuity Straight Through Processing E-Signature Process November 2008 Tim Meyer

  2. Business Case • Increase capabilities for Annuity processing throughput • Annuity Sales $300-$600 million a month • 500-1000 Annuity Applications a week • Signature upfront equals higher compliance for Distributor and Carriers • No chance of marked up application • Carrier is guaranteed to receive signed application • Improve audit trail • Improved user experience • Eventual integration with corporate portal where customers can retrieve all financial paperwork

  3. Challenges • Integration with third party Order Entry vendor • Integration with corporate portal out of scope for initial phase • Current portal does not support electronic contract signing (lock\bind) • Project schedules • Multiple signers • Require workflow • A signer might not be a Merrill Lynch account holder • Allow for Opt Out Process • Aggressive project schedule

  4. Solution After evaluating several providers SIGNiX was chosen. • ASP Model for E-Signature • Allows for a tactical deployment • Met security, workflow, and NAVA STP standard requirements • Flexible integration • No capital expenditures • Fits the Service Oriented Architecture (SOA) paradigm of Straight Through Processing • Existing Relationship with Merrill Lynch • Strong knowledge of Insurance Industry • Very active within NAVA workgroups • Past relationship with Order Entry vendor

  5. Annuity Straight-Through Processing • Agent and Client meet and agree on an Annuity product. • The Agent fills out the order information via an integrated third-party Annuity Order Entry vendor. • Upon submit, the order goes through a compliance review process to determine the suitability of the sale.

  6. Annuity Straight-Through Processing • Upon completion of the Suitability process, the Annuity Document Package is securely sent from Order Entry vendor to Signix via a standard NAVA E-Doc message. • The Document Package that is generated by the Order Entry process consists of multiple documents, each of which may need signatures and must be signed in a designated order then bound and locked for transmission to the carrier along with the audit trail. • Consents • Replacement Disclosure Forms • Application Form • Allocation Instruction Form • Exchange\ Rollover Form • Rate Lock Request • Policy Disclosure Form • The workflow for the signatures is determined via the message contents and the first signer is notified via email.

  7. Annuity Straight-Through Processing • The email address field must be supplied for any required signer. This may include: • Owner • Joint Owner • Annuitant • Joint Annuitant • FA Note: A required signer might not be a Merrill Lynch account holder.

  8. Annuity Straight-Through Processing Clicking on the link navigates the client’s browser to the e-contract safe harbor. The user is presented with the E-contract disclosure consent form which they must choose Consent or Decline to proceed. As an alternative the consent could be included as the first document for signature in the document packet. Either way, each signer must consent. Some signers may not be ML account holders. Note: This is only a sample for demonstration purposes. The wording has not been vetted for compliance or correctness.

  9. Annuity Straight-Through Processing • Upon navigating to the safe harbor site, the customer is presented with a disclose consent. This is the first possible opt out. • The user is authenticated via several generated interactive questions.

  10. Annuity Straight-Through Processing The e-contract workflow engine now determines the next required signature and repeats the notification process by signaling to Merrill Lynch the next required signer context. Merrill Lynch can then send out the next email. The FA can be alerted via email of the status changes of the application as they are today. This includes status changes regarding signatures.

  11. Annuity Straight-Through Processing After the final signature is gathered, the E-Contract vendor sends a Completed status message to the Annuity Order Entry system, the carrier signed documents via the DTCC, and the complete document package to Merrill Lynch. The document packages would also include the transaction log. The Order Entry vendor would send the order data via the DTCC to the carrier as they do today. Merrill Lynch systems would store the documents and transaction log in the existing Records Management system. The carrier processes the Order data, stores the signed application, and issues the contract. The Client is mailed a New Application Package by the carrier. At this point the transaction is considered complete.

  12. Future • Phased rollout of carriers through 2009 • Full Integration with ML Online for Outstanding Customer Experience • Provide for E-Contract signing of Annuity Applications within ML Online • Integrated Authentication • Higher Security Standard • Delivery of New Annuity Application Package via ML Online • E-Signature for In Force Annuity Documents • Partial Withdrawals

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