Proprietary Annuity Standard Donated To Advance Work Of NAVA, ACORD
The National Association for Variable Annuities and ACORD, two nonprofit entities in insurance, are praising the donation by AnnuityNet, Inc. of its proprietary XML standard as “a good starting point” toward development of a universal standard in this area.
“This is a tremendous contribution to the standardization effort [that will allow] straight through processing of annuities electronically,” states Deborah Tucker, assistant vice president of communications at Reston, Va.-based NAVA.
“Its a good starting pointtowards creating better service and faster service for customers and reducing costs by adopting standards,” says Rick Heil, program manager, life standards, for Pearl River, N.Y.-based ACORD. “Its good news for everyone.”
Earlier this month, Leesburg, Va.-based AnnuityNet, a provider of online technology for financial services, announced that it was giving to the industry its formerly proprietary standard for transmitting and exchanging annuity account and transaction information across the Internet.
AnnuityNet said it hoped to support and accelerate efforts by NAVA and others in the industry toward creating a universally adopted industry standard for annuity application data exchange. The company said its technology “enables nearly error-free completion of online applications and full account servicing capabilities,” driven by its scalable XML data standard.
XML–extensible markup language–is a set of rules for developing standard codes that computers can use to read and combine information stored in different database formats.
“We developed an XML standard that describes all the data required to package up an annuity electronically, including all the required forms,” explains Steve Dunlap, senior vice president, sales and marketing, for AnnuityNet. “All the data is included in this standard. Its complete, so it could be used as a foundation for NAVA and ACORDs efforts.”
Tucker says NAVAs technology committee has been working cooperatively with ACORD on a new standard for annuities. The value of AnnuityNets contribution, she notes, is that “AnnuityNet has already designed something–an order entry system–that already takes into account a number of actions and requirements” related to annuities.
Part of the process has been “learning what it takes to create the standard,” says Tucker. “AnnuityNet, who was very active, said Well offer up our intellectual propertyas a starting point.”
“Even our competitor could pick this [standard] up and use it, but we were able to get comfortable with that, because to the extent that we can display what we have accomplished, that demonstrates our leadership,” notes Dunlap. “A rising tide lifts all boats. This is good for all of us.”
According to Heil, most of the “major vendors in this space” are contributing openly to the standards effort for annuities.
“The industry is moving from proprietary standards to open standards,” Tucker asserts. “We want to get everyone using the same format. That will put us on a more even playing field with other financial products like mutual funds,” where such standards are already in place.
Tucker adds that one thing the group hopes to accomplish is to reduce errors in annuity transactions by having “less re-keying” going on.
“There will be additional give and take,” says Tucker. “The standard needs to be put into the XML language of ACORD.”
Tucker says the working group expects to initiate that effort by the end of June and hopes to have a standard ready for an industry pilot in the fall. “We hope to have a tested and final standard by the end of the year,” she notes, adding that NAVA will simultaneously develop an implementation guide for the standard.
Reproduced from National Underwriter Life & Health/Financial Services Edition, May 20, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.