The National Securities Clearing Corp. (NSSC) is seeking a rule change in connection with efforts to create an automated system for insurance and retirement product transfers, replacements and exchanges.
The NSCC, New York, a self-regulatory organization, has filed the proposed rule change with the U.S. Securities and Exchange Commission (SEC).
The SEC is seeking public comments on the proposed change.
The NSCC wants to replace its existing IPS system, which requires many manual steps for users that want to transfer or exchange policies, with the new system sometime after Jan. 1, 2011.
To implement the change, the NSCC wants to add a new section to Rule 57 — "Insurance and Retirement Processing Services" – that would let NSCC centralize and automate the processing of replacements, officials say in a description of the proposed changes published today in the Federal Register.
One carrier would ask for a replacement, and the other, "delivering carrier" would have to confirm the request, reject it, or ask for a change in a standard format.
The new section would waive any paper document and physical signature requirements other than those required by state law, and the transfer of any physical documents required by the states would be handled outside the NSCC system.
The NSCC intends to charge $5 per request for replacement, with the orginating carrier, or "receiving carrier," paying $3.75 of the total, and the delivering carrier paying $1.25.
The fee for getting the status of a pending request for replacement would be $1 per request, with the cost split evenly between the receiving carrier and the delivering carrier.
Comments are due Dec. 21.
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