What Is Life Insurance Straight Through Processing?

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By Ken Leibow – September 1, 2019

Broker World Magazine 

 

I get asked all the time: “What is life insurance straight through processing (STP)?” The answer varies because there are different perspectives based on whether you are a carrier, vendor, BGA, agent or consumer. Life insurance STP has evolved quickly because of the advancement of insurtech, with each piece contributing to the next phase (Term Ticket Model, Accelerated Underwriting—Predictive Automated Underwriting, Digital Sales Platform). So, let’s explore the different types of STP, the benefits today and the trends for the future.

 

Term Ticket Model
In the Distribution world, Straight Through Processing was defined as a Drop-Ticket or Term-Ticket during its peak years from 2011-2016—running a term insurance quote, then clicking a button to do an abbreviated eApp, and then ePolicy delivery. A term ticket is not a full eApp. The term ticket platform may be a proprietary platform like Legal & General AppAssist or a multi-carrier platform like iPipeline iGO. Basically, it involves filling out questions for most of a Part 1 and replacement information, then asking the best time to call your client. The data and pre-filled forms are sent to a call center at the carrier or a third-party service provider like ExamOne for example. The client gets a call that typically lasts 30 minutes or less. The person conducting the tele-interview asks questions to complete the Part 1 and the medical questions for the Part II of the life insurance application. The interviewer follows a reflective script. Signatures are captured for the medical authorization in some cases, and for all the relevant forms, via Voice Signature. The interviewer also schedules the Paramed exam.

 

Once the underwriter receives the lab slip from the exam, with the results from blood drawn from the client, and reviews all the necessary information captured in the interview, then they approve the case—unless the underwriter determines additional information is needed like a copy of medical records from a doctor or hospital (APS). If the case is approved as applied for, and the client has provided his or her email address and opted in for eDelivery, then a notification either goes out to the BGA, agent or client via email depending on the eDelivery workflow setup. The eDelivery process for the client is a ceremony of consenting to eDelivery, even though they already opted in, reviewing the policy, paying the balance of premium due either by credit card or EFT, and then eSigning the delivery requirements like an amendment or delivery receipt. The client then saves or prints their policy. The agent is notified, the case is placed in force, and commissions are paid. This is one example of Term Ticket STP, however each carrier has slight variations of the process described above, and different distribution channels, like direct marketers, have a modified version of a Term Ticket STP. Essentially, it’s the same model.

 

Benefits to the BGA and Agent:

  • Cases submitted in good order;
  • Handing off fulfillment to focus on sales;
  • Faster cycle time;
  • Higher placement ratio;
  • No chasing down delivery requirements—especially premiums;
  • Commissions paid faster;
  • Reduce travel costs in delivering a policy; and,
  • Seamless experience.

 

Benefits to the Carrier:

  • Cases submitted in good order;
  • Control over the fulfillment process;
  • Higher conversion rate from interview to exam;
  • Faster cycle time;
  • Higher placement ratio;
  • Ease of doing business; and,
  • Reduced costs of mailing and printing policies.

 

This article was originally published by Broker World Magazine, September 1, 2019. To read the complete article, then please click the Button below:

Proformex Publishes Analysis of Life Insurance Best Interest Standards

 

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WRITTEN BY

Kris Beck, CEO

Proformex

 

An In-Depth Look: Best Interest Standards for Life Insurance

Where did they start, where are they now, and where are they going?  “Best interest standards” are regulations that require carriers and producers that sell life insurance to establish criteria and processes overseeing product recommendations given to retail consumers. Under best interest standard regulations, all investment recommendations given to consumers must be made with the consumer’s needs top of mind. The ultimate goal is to protect the consumer and define the ethical duties of agents and advisors selling life insurance. This paper takes a deeper look of how best interest standards have been introduced to the life insurance industry, the various moves made on the state level to legislate these standards, and the future direction of the industry.

 

Download or View the full Article click the Executive Brief Button below:

The Big 3 (ACORD, DTCC, & IRI) Meet to Collaborate on Addressing the Challenges of the Industry

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On the last week of July, 2019, insurance industry technology leaders and experts from the Depository Trust Corporation (DTCC), Insured Retirement Institute (IRI) and ACORD had a meeting in New York. For many years the three organizations (ACORD, DTCC and IRI) have worked on countless initiatives that either compliment or overlap their products and services. Representatives from all three organizations do participate in each other’s working groups and committees to sync up and contribute where possible, however this is the first time in recent years that that the three organizations exclusively have met to update each other on key activities and see where they can work together moving forward.

 

Some of the attendees included Jim Quinn- Chief Technology Officer of IRI;  and from DTCC’s Insurance & Retirement Services Division: Barbara Smith – Executive Director and Jeanann Smith, Senior Product Management. ACORD who hosted the meeting had several key people participate such as Malou August – Senior Vice President of Standards & Membership, Karen Mottley – Business Architect of the Life & Annuity Program, and Yolanda Austin who is ACORD’s leading Life & Annuity Consultant.

 

ACORD provided InsurTech Express a quote signed off from leaders of all three organizations, “ACORD, DTCC and IRI met to discuss key initiatives, and identify opportunities to collaborate. Some of the initiatives we discussed were Digital Standards, Distributed Ledger Technology, New Business, Replacement Automation, and Regulation 187 efforts. The initial focus is on annuities, and we also plan to engage industry leaders throughout the broader Life community. We are excited to come together to help guide industry priorities, promote increased standards adoption, and contribute to greater successes within our industry.”  The meeting didn’t only include updating on each organization’s vision and key initiatives, but they also wanted to address the challenges the industry is experiencing today. ACORD, DTCC and IRI realize there are several opportunities where they can better collaborate.

 

The good news is that the meeting was a success! There was progress on getting alignment on issues in today’s initiatives and addressing those for the future. ACORD, DTCC and IRI do have common goals like increasing adoption and promoting standard usage. Not only did they decide to collaborate on the key initiatives mentioned above (Digital Standards, Distributed Ledger Technology, New Business, Replacement Automation and Regulation 187), but it  was agreed upon to continue the conversation and meet again, which includes taking some substantive action like proposing to write a White Paper together for providing guidance in the industry.

 

On the sales and business side of insurance and retirement services, many people don’t realize that the engine behind the seamless automation for submitting new business, paying commissions, money settlement, Inforce services, producer licensing, advocacy and education are all driven or a result of the initiatives by ACORD, DTCC, and IRI. The Big 3 working together will help with speed to market, reducing costs, growing adoption, and driving more implementations making the industry a better place.

 

About ACORD:

ACORD (Association for Cooperative Operations Research and Development) is the global standards-setting body for the insurance and related financial services industries. ACORD’s Mission: For nearly 50 years, ACORD has been a non-profit, industry-owned organization that enables the success of the global insurance industry by leveraging the flow of data and information across all insurance stakeholders through relevant and timely data standards.

 

About DTCC Insurance & Retirement Services:

DTCC’s Insurance & Retirement Services (I&RS) offers a suite of streamlined processing and compliance-driven solutions for carriers and their distribution partners — broker/dealers, banks, brokerage general agencies, independent broker/dealers and other firms — through a secure, centralized and automated infrastructure. This infrastructure enables insurance carriers and distributors to exchange information at various points throughout the annuity and life insurance processing cycle.

 

About the Insured Retirement Institute:

The Insured Retirement Institute (IRI) is the leading financial services trade association for the retirement income industry. Members represent the entire supply chain of insured retirement strategies, including Insurers, Banks, Asset Managers, Broker-Dealers, Distributors, Financial Advisors and Solution Providers. IRI provides a wealth of educational, research, advocacy, and ops & tech benefits to its members