Life Company Central (LCC) was formed to develop and implement a common information exchange system for the life insurance industry. The system is intended to provide access through a secure multi-company portal enabling suppliers and distributors to process and administer business and exchange data. The system will evolve over time to provide ever-increasing functionality along the three main themes of : Compensation, New Business Processing, and In-Force Management. The participants in the Life Company Central Committee are Canada Life, Manulife Financial, RBC Insurance, Standard Life, Sun Life Financial, and Transamerica Life Canada.
The LCC committee has looked at a number of models of how this technology can be delivered and will continue to investigate additional options. The committee prefers to capitalize on existing infrastructures and has entered into discussions with FundSERV and DSPA (DSPA Software Inc.) to enable the committee to validate that the concept is feasible and will deliver the benefits needed to justify formal development of the information exchange system.
FundSERV currently provides services to many of these same insurance companies and distributors on the mutual fund side and can provide the technical infrastructure for the LCC. DSPA currently provides compensation processing for a number of the LCC companies and can provide the applications for commission information, population management (management of a unique producer identity as opposed to the different identifier codes currently used by each company), and a consolidated new business inquiry. The approach for New Business processing and In-Force management will be reviewed at subsequent stages.
As security, reliability of the infrastructure, and data integrity are three crucial elements of any solution, specific attention was paid to the existing security that was built into the technologies to be used.
The committee is aware that every insurance company and distributor has different systems and the need for open architecture and common standards must be addressed with any possible technology solution. The Canadian Life Insurance EDI Standards Organization (CLIEDIS) is the ACORD Regional Management Association for Canada, and strongly advocates the adoption of ACORD XMLife and TxLife data standards throughout the industry. At present a number of distributors, carriers, and vendors are actively supporting this standard.
Any future solutions developed by LCC will support these standards. With the use of common data formats and a common web portal, everyone in the industry can capitalize on cost savings, ease of doing business, and significantly reduce the number of feeds and links they are required to maintain.
Rather than choose or endorse any specific applications, the committee is working hard to ensure that each company can use their preferred technology solutions, provided they meet the ACORD standards. LCC is focused on an efficient transaction handling mechanism, with standardized technology integration requirements. This way insurance companies, distributors, and vendors will be able to integrate their existing applications, and explore new alternatives, that can connect through LCC in a “plug and play” fashion.
The committee has now endorsed this initiative and the next step is to develop the business model that will determine the financial viability, operational effectiveness, corporate governance issues, and examine the various issues of integration.
This next phase will also involve more interaction with the individual companies and groups of distributors to understand the costs and benefits that would result from this integration. The committee expects to be reviewing the financial model in the fall.
Tags: CLIEDIS, Life Insurance
