1 National Securities Clearing Corporation is a subsidiary of The Depository Trust & Clearing CorporationNational Securities Clearing Corporation is a subsidiary of The Depository Trust & Clearing CorporationNational Securities Clearing Corporation is a subsidiary of The Depository Trust & Clearing CorporationNational Securities Clearing Corporation is a subsidiary of The Depository Trust & Clearing Corporation

National Securities Clearing CorporationNational Securities Clearing Corporation

Insurance Processing ServiceInsurance Processing Service

Susan E. NugentSusan E. NugentDirector, Business DevelopmentDirector, Business Development

National Securities Clearing CorporationNational Securities Clearing Corporation

Insurance Processing ServiceInsurance Processing Service

Susan E. NugentSusan E. NugentDirector, Business DevelopmentDirector, Business Development

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Insurance Processing ServicesInsurance Processing ServicesInsurance Processing ServicesInsurance Processing Services

• AgendaAgenda• IntroductionIntroduction

• IBD StatsIBD Stats

• IPS Value PropositionIPS Value Proposition

• Current FunctionalityCurrent Functionality• New Business FlowNew Business Flow

• Functionality DetailsFunctionality Details

• Future ReleasesFuture Releases• Product Profile ScreensProduct Profile Screens

• Vision Vision

• AgendaAgenda• IntroductionIntroduction

• IBD StatsIBD Stats

• IPS Value PropositionIPS Value Proposition

• Current FunctionalityCurrent Functionality• New Business FlowNew Business Flow

• Functionality DetailsFunctionality Details

• Future ReleasesFuture Releases• Product Profile ScreensProduct Profile Screens

• Vision Vision

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Insurance Processing ServicesInsurance Processing ServicesInsurance Processing ServicesInsurance Processing Services

• IBD Member StatisticsIBD Member Statistics• IBD ParticipantsIBD Participants 4343

• AAP 1111

• COM 2828

• FAR 44

• PFF 22

• PVF 1212

• IPS Approved, Not ActiveIPS Approved, Not Active 15 15

• IBD Member StatisticsIBD Member Statistics• IBD ParticipantsIBD Participants 4343

• AAP 1111

• COM 2828

• FAR 44

• PFF 22

• PVF 1212

• IPS Approved, Not ActiveIPS Approved, Not Active 15 15

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The IPS Value Proposition

•Centralize, Standardize and Automate•Mainstream Insurance Products•Provide solutions for Life, Annuity, LTC

•Increase Efficiency, Save Money•Minimize Risk•Stabilize money flows, eliminate lost or

misplaced checks, net settle monies • Provide Low Cost, Responsive Industry

Solutions• Run as “not for profit” •Ultimately rebate fees back to participants

•Centralize, Standardize and Automate•Mainstream Insurance Products•Provide solutions for Life, Annuity, LTC

•Increase Efficiency, Save Money•Minimize Risk•Stabilize money flows, eliminate lost or

misplaced checks, net settle monies • Provide Low Cost, Responsive Industry

Solutions• Run as “not for profit” •Ultimately rebate fees back to participants

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IPS Current Functionality – Beginning to End Automation Licensing & Appointments (LNA) New Application/Premium (APP) Positions & Valuations (POV) Asset Pricing (AAP) Commissions (COM) Financial Activity Reporting (FAR) Subsequent Premium (SUB)

Licensing & Appointments (LNA) New Application/Premium (APP) Positions & Valuations (POV) Asset Pricing (AAP) Commissions (COM) Financial Activity Reporting (FAR) Subsequent Premium (SUB)

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IPS New Business Flow

Licensing and

Appointments(LNA)

Product Profile

(Late 2002)

MoneySettlement

FinancialActivity

Reporting (FAR)

InitialApplication

(APP)

MoneySettlement

Is rep eligible to sell carrier’s

product?

What product

should rep sell?

Confirm the Application

Commissions(COM)

Positions and

Valuations(POV, AAP)

Pay the rep for selling carrier’s product.

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Licensing and Appointment Processing

•Provides a two-way flow - request and response system - of data from insurance carrier to distributor or distributor to carrier

•Generates a stream of outgoing files, Monday thru Saturday at 10:00 AM and 4:00 PM ET

•Accepts inbound files, Monday thru Saturday from 2:00 AM to midnight ET

•Provides for same-day money settlement

•Handles multiple transaction types

•Provides a two-way flow - request and response system - of data from insurance carrier to distributor or distributor to carrier

•Generates a stream of outgoing files, Monday thru Saturday at 10:00 AM and 4:00 PM ET

•Accepts inbound files, Monday thru Saturday from 2:00 AM to midnight ET

•Provides for same-day money settlement

•Handles multiple transaction types

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Licensing and Appointment Benefits

•Electronic data replaces faxes, overnight mail and other paper

•Less paper and mail leads to reduced costs

•Information is transmitted in a standardized format

•Proprietary links are replaced by a single link to IPS

•Reduces turnaround time for license and appointment transactions

•Greater compliance oversight available•Opportunity to “audit” the status of

appointments between trading partners creates even more cost savings

•Electronic data replaces faxes, overnight mail and other paper

•Less paper and mail leads to reduced costs

•Information is transmitted in a standardized format

•Proprietary links are replaced by a single link to IPS

•Reduces turnaround time for license and appointment transactions

•Greater compliance oversight available•Opportunity to “audit” the status of

appointments between trading partners creates even more cost savings

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Initial Application & Premium Processing Detail

•One way flow: Distributor to Carrier•Same day money settlement cutoff: 2:00

PM ET•Handles net/gross premium, pends 1035

exchanges•Distributor’s “screens” provide rep/agent

data input facility• Compliance still performed at distributor

level• Paper follow-up, where required, still present

•No separate order confirmation process by carrier

•Five output cycles, Monday thru Friday

•One way flow: Distributor to Carrier•Same day money settlement cutoff: 2:00

PM ET•Handles net/gross premium, pends 1035

exchanges•Distributor’s “screens” provide rep/agent

data input facility• Compliance still performed at distributor

level• Paper follow-up, where required, still present

•No separate order confirmation process by carrier

•Five output cycles, Monday thru Friday

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Initial Application and Premium Benefits

•Automates the transmittal of annuity application information

•Reduces/eliminates not in good order business

•Condenses a days/weeks process into a 24-hour process

•Reduces dollars lost throughout the process (breakage)

•Increases time representatives have to sell new business (not fixing old applications)

•Promotes increased sales activity since products are easier to process

•Automates the transmittal of annuity application information

•Reduces/eliminates not in good order business

•Condenses a days/weeks process into a 24-hour process

•Reduces dollars lost throughout the process (breakage)

•Increases time representatives have to sell new business (not fixing old applications)

•Promotes increased sales activity since products are easier to process

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Financial Activity Reporting•Supports diverse transactions in an

Annuity or Life contract• Subsequent/add on premium from client• Internal sub-account/fund transfers or

reallocations• Disbursements• Full or partial surrender• Annuitization• Minimum Required Distribution

•Will assist in complying with the Patriot Act

•No money settlement interface. •One FAR file can report on many

events in the same contract

•Supports diverse transactions in an Annuity or Life contract• Subsequent/add on premium from client• Internal sub-account/fund transfers or

reallocations• Disbursements• Full or partial surrender• Annuitization• Minimum Required Distribution

•Will assist in complying with the Patriot Act

•No money settlement interface. •One FAR file can report on many

events in the same contract

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Subsequent Premium•Processing Information• Same day money settlement cutoff: 2:00 PM

ET

• No separate order confirmation process by carrier

• Five output cycles daily Monday thru Friday

Benefits• Automates the transmittal of subsequent

premium information• Reduces/eliminates not in good order business• Condenses a days/weeks process into a 24-

hour process• Premium dollars can be settled using the

Money Settlement System• Eliminates checks and wires and their

associated costs

•Processing Information• Same day money settlement cutoff: 2:00 PM

ET

• No separate order confirmation process by carrier

• Five output cycles daily Monday thru Friday

Benefits• Automates the transmittal of subsequent

premium information• Reduces/eliminates not in good order business• Condenses a days/weeks process into a 24-

hour process• Premium dollars can be settled using the

Money Settlement System• Eliminates checks and wires and their

associated costs

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Future Insurance Product Developments

Product Profile• Implementing ACORD standard in

conjunction with NAVA

• DTCC will build a repository to house product profile data

Life Application• Data capture to include new life

businessXML Standard• Using the ACORD standard

Product Profile• Implementing ACORD standard in

conjunction with NAVA

• DTCC will build a repository to house product profile data

Life Application• Data capture to include new life

businessXML Standard• Using the ACORD standard

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Product Profile – Distributor Screens

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Product Profile – Distributor ScreensThis user will only see this screen if they have a Branch certificate so that they can enter in the

participant for which they are representing.

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Product Profile – Distributor Screens

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DTCC Vision

“By 2005, DTCC will become the provider of choice worldwide

for investment servicing solutions through leadership,

innovation and technology”

“By 2005, DTCC will become the provider of choice worldwide

for investment servicing solutions through leadership,

innovation and technology”