The Depository Trust & Clearing Corporation (DTCC) today announced it was supporting the insurance industry's move toward straight-through processing (STP) by incorporating new messaging standards into future services offered by DTCC's Insurance Services group.
Following an agreement with the Association for Cooperative Operations Research and Development (ACORD), beginning this year, DTCC's Insurance Services will use ACORD's Extensible Markup Language (XML) standards. This will set the stage for DTCC to support real-time information exchange across different technology platforms that are used by the industry to process annuity, life-insurance and retirement income contracts.
The ACORD XML standards serve as a common language for streamlining communications among carriers, distributors and third-party providers, regardless of computing environment. Their adoption by Insurance Services, a business unit of DTCC's National Securities Clearing Corporation subsidiary, reflects increased industry interest in and use of this flexible technology, especially as companies migrate from proprietary systems to industry standards for sharing information over disparate hardware, programming languages and operating systems.
"Leveraging ACORD XML standards in our services demonstrates DTCC's ongoing commitment to meet the needs of the insurance industry and our customers and provide innovative technology solutions that create higher levels of performance," said John Ziambras, DTCC managing director, Insurance Services. "Several of our carrier customers helped create ACORD's standards, and some are already using them as they build Web-based applications. Incorporating the standards into our services will help customers not only maximize their current XML investments, but also support them as they evolve toward new models that can easily be adapted to meet their strategic business goals."
"The adoption of ACORD XML standards as a business enabler for sharing information - while also driving down costs and enhancing services - is clearly gaining momentum within the industry," said Gregory A. Maciag, president and chief executive officer of ACORD. "Our relationship with DTCC will add to that momentum and further underline the valueelue of standards in helping the insurance industry develop integrated Web solutions that deliver greater efficiency, flexibility and customer value."
Insurance Services is developing several new services that will incorporate ACORD XML standards. For example, Fund Transfers will automate and standardize broker-initiated fund transfers within variable annuity products held by insurance carriers. An Attachments service will support the electronic transfer of imaged documents, signatures and forms related to pre- and post-trade transaction processing of annuities and life insurance contracts, eliminating paper exchanges, phone calls and faxes. DTCC expects to launch both services by the end of 2007, subject to regulatory approval by the Securities and Exchange Commission (SEC). A third service to incorporate ACORD XML standards is Replacements, which will automate and standardize transfers of annuity and life insurance assets from one insurance carrier to another. Pending approval from the SEC, DTCC plans to introduce Replacements in 2008.
"The DTCC-ACORD agreement is a big plus for the industry. An immediate advantage will be the boost it gives to automating the processing of annuities, an increasingly important component of retirement planning as millions of individuals begin to leave the work force," said Mark Mackey, president and chief executive officer of NAVA, the association for insured
retirement solutions. "DTCC's support will be critical to the
implementation of our STP standards initiative," which involves simplifying and improving the electronic annuity purchase process for consumers,
insurers, distributors and regulators.
Created by NSCC in 1997, Insurance Services offers a suite of solutions aimed at helping insurance companies and distributors streamline the sale, servicing, and processing of annuities and life insurance. The business line serves more than 300 carriers and broker/dealers, banks, and other distributors and links them through a single gateway that handles thousands of trading relationships. In 2006, Insurance Services settled 53.5 million insurance transactions, representing more than $16 billion in value.