1 National Securities Clearing Corporation is a subsidiary of The Depository Trust & Clearing Corporation National Securities Clearing Corporation Insurance Processing Service Susan E. Nugent Director, Business Development National Securities Clearing Corporation Insurance Processing Service Susan E. Nugent Director, Business Development

2 Insurance Processing Services AgendaAgenda IntroductionIntroduction IBD StatsIBD Stats IPS Value PropositionIPS Value Proposition Current FunctionalityCurrent Functionality New Business FlowNew Business Flow Functionality DetailsFunctionality Details Future ReleasesFuture Releases Product Profile ScreensProduct Profile Screens VisionVision AgendaAgenda IntroductionIntroduction IBD StatsIBD Stats IPS Value PropositionIPS Value Proposition Current FunctionalityCurrent Functionality New Business FlowNew Business Flow Functionality DetailsFunctionality Details Future ReleasesFuture Releases Product Profile ScreensProduct Profile Screens VisionVision

3 Insurance Processing Services IBD Member StatisticsIBD Member Statistics IBD Participants43IBD Participants43 11AAP11 28COM28 4FAR4 2PFF2 12PVF12 IPS Approved, Not Active 15IPS Approved, Not Active 15 IBD Member StatisticsIBD Member Statistics IBD Participants43IBD Participants43 11AAP11 28COM28 4FAR4 2PFF2 12PVF12 IPS Approved, Not Active 15IPS Approved, Not Active 15

4 The IPS Value Proposition Centralize, Standardize and Automate Mainstream Insurance Products Provide solutions for Life, Annuity, LTC Increase Efficiency, Save Money Minimize Risk Stabilize money flows, eliminate lost or misplaced checks, net settle monies Provide Low Cost, Responsive Industry Solutions Run as “not for profit” Ultimately rebate fees back to participants Centralize, Standardize and Automate Mainstream Insurance Products Provide solutions for Life, Annuity, LTC Increase Efficiency, Save Money Minimize Risk Stabilize money flows, eliminate lost or misplaced checks, net settle monies Provide Low Cost, Responsive Industry Solutions Run as “not for profit” Ultimately rebate fees back to participants

5 IPS Current Functionality – Beginning to End Automation n Licensing & Appointments (LNA) n New Application/Premium (APP) n Positions & Valuations (POV) n Asset Pricing (AAP) n Commissions (COM) n Financial Activity Reporting (FAR) n Subsequent Premium (SUB) n Licensing & Appointments (LNA) n New Application/Premium (APP) n Positions & Valuations (POV) n Asset Pricing (AAP) n Commissions (COM) n Financial Activity Reporting (FAR) n Subsequent Premium (SUB)

6 IPS New Business Flow Licensing and Appointments (LNA) Product Profile (Late 2002) Money Settlement Financial Activity Reporting (FAR) Initial Application (APP) Money Settlement Is rep eligible to sell carrier’s product? What product should rep sell? Confirm the Application Commissions (COM) Positions and Valuations (POV, AAP) Pay the rep for selling carrier’s product.

7 Licensing and Appointment Processing Provides a two-way flow - request and response system - of data from insurance carrier to distributor or distributor to carrier Generates a stream of outgoing files, Monday thru Saturday at 10:00 AM and 4:00 PM ET Accepts inbound files, Monday thru Saturday from 2:00 AM to midnight ET Provides for same-day money settlement Handles multiple transaction types Provides a two-way flow - request and response system - of data from insurance carrier to distributor or distributor to carrier Generates a stream of outgoing files, Monday thru Saturday at 10:00 AM and 4:00 PM ET Accepts inbound files, Monday thru Saturday from 2:00 AM to midnight ET Provides for same-day money settlement Handles multiple transaction types

8 Licensing and Appointment Benefits Electronic data replaces faxes, overnight mail and other paper Less paper and mail leads to reduced costs Information is transmitted in a standardized format Proprietary links are replaced by a single link to IPS Reduces turnaround time for license and appointment transactions Greater compliance oversight available Opportunity to “audit” the status of appointments between trading partners creates even more cost savings Electronic data replaces faxes, overnight mail and other paper Less paper and mail leads to reduced costs Information is transmitted in a standardized format Proprietary links are replaced by a single link to IPS Reduces turnaround time for license and appointment transactions Greater compliance oversight available Opportunity to “audit” the status of appointments between trading partners creates even more cost savings

9 Initial Application & Premium Processing Detail One way flow: Distributor to Carrier Same day money settlement cutoff: 2:00 PM ET Handles net/gross premium, pends 1035 exchanges Distributor’s “screens” provide rep/agent data input facility Compliance still performed at distributor level Paper follow-up, where required, still present No separate order confirmation process by carrier Five output cycles, Monday thru Friday One way flow: Distributor to Carrier Same day money settlement cutoff: 2:00 PM ET Handles net/gross premium, pends 1035 exchanges Distributor’s “screens” provide rep/agent data input facility Compliance still performed at distributor level Paper follow-up, where required, still present No separate order confirmation process by carrier Five output cycles, Monday thru Friday

10 Initial Application and Premium Benefits Automates the transmittal of annuity application information Reduces/eliminates not in good order business Condenses a days/weeks process into a 24- hour process Reduces dollars lost throughout the process (breakage) Increases time representatives have to sell new business (not fixing old applications) Promotes increased sales activity since products are easier to process Automates the transmittal of annuity application information Reduces/eliminates not in good order business Condenses a days/weeks process into a 24- hour process Reduces dollars lost throughout the process (breakage) Increases time representatives have to sell new business (not fixing old applications) Promotes increased sales activity since products are easier to process

11 Financial Activity Reporting Supports diverse transactions in an Annuity or Life contract Subsequent/add on premium from client Internal sub-account/fund transfers or reallocations Disbursements Full or partial surrender Annuitization Minimum Required Distribution Will assist in complying with the Patriot Act No money settlement interface. One FAR file can report on many events in the same contract Supports diverse transactions in an Annuity or Life contract Subsequent/add on premium from client Internal sub-account/fund transfers or reallocations Disbursements Full or partial surrender Annuitization Minimum Required Distribution Will assist in complying with the Patriot Act No money settlement interface. One FAR file can report on many events in the same contract

12 Subsequent Premium Processing Information Same day money settlement cutoff: 2:00 PM ET No separate order confirmation process by carrier Five output cycles daily Monday thru Friday Benefits Automates the transmittal of subsequent premium information Reduces/eliminates not in good order business Condenses a days/weeks process into a 24-hour process Premium dollars can be settled using the Money Settlement System Eliminates checks and wires and their associated costs Processing Information Same day money settlement cutoff: 2:00 PM ET No separate order confirmation process by carrier Five output cycles daily Monday thru Friday Benefits Automates the transmittal of subsequent premium information Reduces/eliminates not in good order business Condenses a days/weeks process into a 24-hour process Premium dollars can be settled using the Money Settlement System Eliminates checks and wires and their associated costs

13 Future Insurance Product Developments  Product Profile Implementing ACORD standard in conjunction with NAVA DTCC will build a repository to house product profile data  Life Application Data capture to include new life business  XML Standard Using the ACORD standard  Product Profile Implementing ACORD standard in conjunction with NAVA DTCC will build a repository to house product profile data  Life Application Data capture to include new life business  XML Standard Using the ACORD standard

14 Product Profile – Distributor Screens

15 Product Profile – Distributor Screens This user will only see this screen if they have a Branch certificate so that they can enter in the participant for which they are representing.

16 Product Profile – Distributor Screens

17 DTCC Vision “By 2005, DTCC will become the provider of choice worldwide for investment servicing solutions through leadership, innovation and technology”