NU Online News Service, May 20, 5:55 p.m. – The National Association for Variable Annuities and the Association for Cooperative Operations Research and Development are praising a recent move by AnnuityNet Inc. to donate its proprietary XML data standard to the annuity industry.
“This is a tremendous contribution to the standardization effort [that will allow] straight-through processing of annuities electronically,” states Deborah Tucker, a spokeswoman for the Reston, Va.-based NAVA.
“It’s a good starting point?towards creating better service and faster service for customers and reducing costs by adopting standards,” says Rick Heil, program manager, life standards, for the Pearl River, N.Y.-based ACORD. “It’s good news for everyone.”
The NAVA technology committee has been working with ACORD, a key insurance technology standards group, to come up with a new, industrywide XML standard for annuities.
XML, or 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. Advocates say a successful XML standard could increase annuity sales by making it easier to sell annuities through the Web.
Earlier this month, AnnuityNet announced it would be giving the annuity industry what used to be its own proprietary XML standard for transmitting and exchanging annuity account and transaction information through the Internet.
AnnuityNet has been using its XML standard in a system that can take annuity application information, check the information as it is being entered, and help companies service existing annuity accounts.
“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. It’s complete, so it could be used as a foundation for NAVA and ACORD’s efforts.”
At NAVA, Tucker says the value of AnnuityNet’s contribution 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,” Tucker says. “AnnuityNet, who was very active, said ?We’ll offer up our intellectual property?as a starting point.’”
AnnuityNet recognizes that it is taking a risk by giving up control over its XML standard, Dunlap says.
“Even our competitor could pick this [standard] up and use it,” Dunlap concedes. “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. A rising tide lifts all boats. This is good for all of us.”
Heil, the ACORD program manager, observes that most of the major vendors in the annuity space are contributing openly to the annuity standards effort.
“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 says one of the group’s goals is to reduce errors in annuity transactions by having “less re-keying” going on.
“There will be additional give and take,” Tucker says. “The standard needs to be put into the XML language of ACORD.”
The annuity standards working group expects to start that effort by the end of June and wants 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,” Tucker says, adding that NAVA will try to develop an implementation guide for the standard while it is developing the standard.