DTCC adds insurance processing service to automated account transfer service

Source: DTCC

The Depository Trust & Clearing Corporation (DTCC) has launched an Insurance Processing Service (IPS) capability to its Automated Customer Account Transfer Service (ACATS), an enhancement that will bring greater speed and efficiency to the transfer of annuity account information from one broker/dealer to another.

Following the successful completion of a pilot program initiated in December 2004, ACATS/IPS went live earlier this month with nine initial customers. DTCC expects several additional firms to go live in the coming months and has received numerous adoption commitments for 2006.

Targeted to insurance carriers, broker/dealers and banks, ACATS/IPS leverages the technology of ACATS, which for 20 years has automated and standardized the transfer of financial assets in brokerage accounts between financial services firms.

The new service is the latest addition to DTCC Insurance Services' comprehensive line up of offerings that streamline insurance and annuity business processing. Both ACATS and ACATS/IPS are offerings of National Securities Clearing Corporation (NSCC), a DTCC subsidiary.

"The ability of ACATS/IPS to streamline annuity account information changes is vital, as it gives us a clearer picture of our client accounts and allows us to manage their total portfolios more efficiently," said Jim Deats, head of Asset Transition Services, Merrill Lynch Insurance Group. "Helping clients move assets quickly and easily is a key measure of customer service. When customers move their brokerage account from one firm to another, they want it done seamlessly, with little or no follow-up on their part, and they expect their total portfolio, including annuities, to be incorporated."

Until now, annuity account information was not automatically transferred to the new broker/dealer of record when a customer changed firms, because the information is generally managed by the insurance carriers, not the broker/dealers. As a result, customers needed to advise their new brokers that they have annuities, and that they want the information added to their brokerage accounts. This has resulted in a time-consuming and inefficient series of phone calls and faxes between broker/dealers and the insurance carriers.

"We are eager to start using the service, as we expect it to significantly enhance our operational excellence by reducing the time and effort we spend going back and forth with broker/dealers on annuity account information transfers," said Michael Hicks, vice president, Investment Product Services, The Hartford.

"By automating the transfer of customer account information between financial services firms, DTCC is working to address our clients' needs to automate and expedite the management of information that was previously processed with cumbersome, manual methods," said John Ziambras, vice president, DTCC Insurance Services. "By bringing ACATS/IPS to market, we are helping our clients gain greater flexibility on how they service clients and manage their accounts."

Customers currently implementing ACATS/IPS include leading insurance carriers – The Hartford, Pacific Life and Prudential Life, and distributors – Merrill Lynch, Piper Jaffray, Robert W. Baird, Stifel, Nicolaus, Wachovia Securities and Wells Fargo Investments. Thomson Beta Systems is acting as a third-party service provider, processing data in ACATS/IPS for a number of the pilot broker/dealers.

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