The Financial Services Institute has endorsed NAVA Inc.’s new straight-through processing initiative for selling annuities.
Insurers and distributors that belong to NAVA, Reston, Va., developed the STP initiative which includes 24 standards for managing new variable, fixed and indexed annuity business electronically.
The Securities Industry and Financial Markets Association, New York, and the American Council of Life Insurers, Washington, already have endorsed the standards. Now, with the FSI endorsement, the standards will extend into the independent broker-dealer community, NAVA says.
The FSI, Atlanta, was formed in 2004 as a stand-alone spin-off from the Financial Planning Association, Denver. The group represents 110 independent broker-dealers and 7,800 registered reps.
FSI members account for about 36% of U.S. annuity sales, according to David Bellaire, FSI general counsel.
FSI member broker-dealers do not have to implement the NAVA STP standards, Bellaire said, but he predicts they will because of the efficiencies and competitive advantages they will gain.
The STP standards apply to areas such as suitability, electronic forms, privacy and records management. They make electronic annuity processing uniform, efficient and accurate, Bellaire said.
For advisors, the new standards will bring several benefits, Bellaire contended. “First, independent registered reps will get a very efficient, cost-effective way of processing compliant annuity transactions. They can enter data and documents from the field that go electronically straight to their broker-dealer’s office, for suitability review and document entry, and then onto the insurance company, also electronically.”
Turnaround time should be faster as a result, Bellaire predicted.