DTCC  – New York – The Depository Trust & Clearing Corporation (DTCC) today announced that pending regulatory approvals its Insurance & Retirement Services division will launch a new Insurance Profile service to facilitate annuities industry compliance with forthcoming U.S. Department of Labor (DOL) Fiduciary Rules around disclosure which are expected to take effect in April 2017. 

Under the new DOL rule, any financial advisor receiving compensation for providing investment advice that is directed to a particular plan sponsor, plan participant or IRA owner will generally be deemed a ‘fiduciary’. Fiduciaries are required to act in their clients’ best interests, while providing new levels of transparency including their qualifications, recommended investments, fees and costs, material conflicts of interest and compensation – data that is largely handled in operational silos and via manual processes across market participant firms today.  

DTCC’s new Insurance Profile will help participants in the annuities marketplace to bridge this operation gap by providing a centralized, automated and standardized solution to help satisfy disclosure requirements.  The solution will support the exchange of data between insurance carriers and distributors for the on-going reporting of fees, expenses and commissions schedules to facilitate both “on demand” disclosures and website disclosures.

Once launched, distributors will be able to leverage Insurance Profile to access expense data at the contract, feature/rider and fund (subaccount) levels from a secure, centralized hub, eliminating the need to search and pull information across individual carrier partners. Carriers, or designated vendors acting on behalf of carriers, will be able to submit and maintain the required disclosure data online, leveraging an easy-to-use Insurance Profile interface.  All data will be communicated via industry-standard ACORD XML and EDI messages.

“At Jackson, we are diligently working to help our broker-dealer partners navigate the complexities of the new regulatory landscape. For most firms, the new fiduciary rule disclosure requirements will bring a host of operational and resource concerns around data,” said Robert Dearman, Vice President of Strategic Initiatives, Legal for Jackson National Life Insurance Company (Jackson). “Once launched, DTCC’s Insurance Profile will provide insurance carriers and distributors with the data they need to provide proper disclosures to investors while enabling them to complete contract onboarding much more quickly. We believe this will enable broker-dealers to continue to do business efficiently and in compliance with the new regulations.”

“By leveraging a central, online data source of comprehensive and standardized annuity information, market participants will be able to increase transparency into annuity expenses and commission schedules, while ensuring access to data that is critical to the adherence of Department of Labor fiduciary disclosure requirements,” stated Ann Bergin, Managing Director and Head of DTCC Wealth Management Services. “Increasing automation in this area will reduce the risks and costs associated with manually processing this data, while eliminating the support and maintenance costs and resources associated with proprietary feeds and databases.”

Insurance Profile will be offered by DTCC’s National Securities Clearing Corporation (NSCC) subsidiary. The service is being developed based on collaboration and feedback from the industry, including guidance from a dedicated working group of over 50 members representing leading insurance carriers and distributors.