Convergence, the new reality: CLIEDIS Seminar Review

(review by Doug Grant, Principal,

This CLIEDIS seminar was held Thursday May 9, 2002. It has
almost become a tradition to have a seminar about the use of electronic data standards in
the Canadian Life Insurance industry, as the first half of a day which then completes with
the CLIEDIS annual meeting. Although the annual meeting is not open to nonmembers, if the
growing attendance at the seminar and the progress which is being made in the use of
standards is any indication, CLIEDIS’ future is bright. The objective of the seminar
was to “discuss the convergence and consolidation occurring within the Canadian
financial services marketplace and how the life insurance industry and standards
development is adjusting to meet this new reality. We’ll look at the change nature of
insurance distribution and include a panel discussion on “XMLife in Action”
where you’ll hear about successful XML implementations.”

Industry Overview: Ev Kent.

Ev Kent, industry consultant, did an admirable job of
describing some of the changes in the Canadian Life Industry, along with the current
status. The broker-dealers as a channel have emerged into a significant force less than
ten years since they were first allowed to sell life insurance products. Ev noted three
main segments in the independent channel – IDA, Mutual Funds and Agencies. In the products
they offer, they are all converging onto the same or similar set of offerings. As they
look increasingly similar, each is trying to create differentiation, and here web tools
and solutions are a key part of the strategy as they compete for a growing share of a
customer’s investment and protection finances.

Life Company Central: Rich Miles

Rich Miles, formerly of Canada Life, is retaining a role in
his retirement as spokesperson for Life Company Central (LCC). Rich provided a history of
LCC, from the arrival of the IDA into the life insurance world. Previously used to instant
information and fast transactions, primarily through the facilities of FUNDSERV, this
group found the slow nature of insurance transactions and communications difficult to work
with. They proposed a FUNDSERV-like facility to address the seeming inefficiencies. In
2001 the insurers took ownership of the concept, which should really be for all channels
rather than just one. Since then studies and proposals have followed. Although many, even
most, agree that electronic distribution in the channels is the way of the future,
everyone has their own agenda and timetable. Balancing all of these perspectives and
creating a portal solution which addresses common needs, at a cost and in the time frame
people want, is the challenge. The LCC has deferred an initial build of a proof-of-concept
platform, and is evaluating several funding and build options. Some of the hurdles and
issues which were noted:

  1. XMLife would be used as a standard, and although more
    companies and others are getting more familiarity with the technology, not everyone is on
    board that XMLife-based information exchange would be the base position.

  2. Will companies understand that MGA’s don’t see
    private company portals as a company’s core competency – their products and
    compensation plans are the core competencies.

  3. Common userids and logons for a broker person for all
    companies, with a common registration, will make this a lot more usable. This approach is
    used today by FUNDSERV. Companies need to accept the security of the portal.

  4. There needs to be some agreement about standard report formats.

  5. Some companies are not yet convinced that there is a business case.

  6. Who pays what needs to be worked out and is always a bone of contention.

Rich drew upon his Canada Life experience to note that
there are huge efficiency and customer service gains to be achieved here, and LCC could
certainly make a strong contribution to those benefits. At this time, LCC in order to move
ahead, needs: buy-in from the potential company and other participants a successful proof
of concept to move through Vendor selection, while ultimately allowing vendor choice
Everyone will need to help move implementations into new transaction areas more company
participation, and distributors to push the companies to move along.


Two people who are heavily involved in Life electronic
standards described the relationship between CLIEDIS and ACORD. Lloyd Chumbley from ACORD
provided a background or history of the Life Standards, from an initial Microsoft-funded
Olife endeavour to today’s data model and XMLife. From an organizational perspective,
ACORD has taken on a global objective to help establish and promote standards, especially
with the global presence of so many industry participants. Many regional and country
groups have started local initiatives. One challenge is the balance between local
standards and global standards, and allowing some degree of local participation and
involvement while enabling the larger and more global initiatives. As CLIEDIS’
representative to ACORD, Jack Brown, PPI described how the relationship between the two
groups has evolved, what role each plays and how they interact. CLIEDIS has become the
regional management authority for ACORD in Canada. As such it represents Canadian
requirements to ACORD, reviews ACORD standards changes to ensure they don’t represent
a conflict with Canadian requirements and makes suggestions which could improve change
requests for Canada. The world of standards is a challenging one and the integration of
the CLIEDIS and ACORD groups appears to be evolving into a good productive relationship.

Panel Discussion

Jack then moderated a panel discussion. The panel was made up of several people involved
in the use of standards. Jack too presented his experience from PPI.

Rick Heil, Program Manager Life Standards, ACORD
Colin Fetter, President, Entredea
Daniel Gauvin, President, Hooper-Holmes
David Hewick, VP IT, RBC Insurance
Stephen Zalewski, Director IT, Equinox Financial

In summary each of the participants noted how they have
started to use XML within their organizations. Once established they started then to reach
outside their own firm, either at their own or a trading partner’s instigation.
Collectively they noted how they may have started with native XML, but that proper use of
XMLife Standards at the beginning would have saved some rework and has made additional
implementations for new trading partners and for additional applications so much easier.


The use of standards never grows immediately or rapidly. However when one looks back after
a period of years, it is usually amazing how much use has occurred and how it seems to
continue growing. The CLIEDIS seminars have shown both how the standards process is
evolving (and is in good hands) and how the use of those standards is catching on in
Canada. For me, a seminar well worth the time and cost.