We asked four leading insurance product and service providers pertinent questions about regulatory compliance and the services that their respective companies offer. Their compelling answers are below and on the following page.INN: In what ways can insurance carriers minimize the cost of compliance?

Timothy Plunkett, PeopleSoft: Death, Taxes, Insurance and now Regulatory Compliance, four things you can always count on. The best way to approach compliance is to treat it like a best practice. Work flow and process flow systems need to be put in place to assure that the reports are produced in a timely manner. In addition it is critical that EPM applications such as scorecard be in place so that progress can be monitored in real time and adjustment made accordingly.

Debra Freitag, CT Insurance: The keys to minimizing compliance costs are threefold: knowing how to comply, installing rigorous validations that eliminate human judgement, and having the most efficient processes imaginable. CT has applied its century-old expertise in compliance, to address those three keys in producer licensing and securities registration with PINnacle Xchange. By combining information tools, with workflow enabled compliance software and role-based single sign-on access, CT Insurance Services has streamlined producer licensing and securities registration compliance to a market conduct perfection standard.

Joe Pacor, SAP: The cost of compliance can be reduced by deploying an integrated, real time, financial software application, such as mySAP Financials. mySAP Financials offers a rich set of capabilities for auditing, risk management, consolidations and performance measurement. In addition, mySAP Financials delivers:

* A faster, more efficient close

* Improved controls through use of workflow, security and internal control-management functions

* Increased transparency of information

This functionality enables the insurance carriers to effectively and efficiently comply with regulations, while minimizing their costs.

INN: How can insurers streamline the state filing compliance process?

Debbi Marquette, InSystems: The compliance process and the issues surrounding it are of importance to multiple business units within an insurance organization. Time to market is critical across the enterprise. The ability to work collaboratively on product development and rapidly access accurate documents and the status of filings is integral to bringing products to market quickly and maintaining their integrity.

InSystems Tracker automates product development and state compliance filing processes, monitors & tracks approvals, and provides web access to rates, rules and forms.

Debra Freitag, CT Insurance Services: The single most important means of streamlining the filing process is to capture the data at the source (the producer) and use it, without human intervention, in all of the company's systems, including state compliance filings. With PINnacle Xchanges' private labeled, single sign-on, a producer can complete the new hire process, request licensure or appointment for all relevant Lines of Authority in any number of states, and have that information feed backend databases, as well as create and file electronically, required filings.

INN: What kind of exposure do carriers face if their processes are not state compliant?

Debra Freitag: Market Conduct consequences for non-compliance includes hefty fines, damage to the company's reputation and producer dissatisfaction. The typically decentralized nature of licensing and securities registration compliance creates multiple opportunities for exposure. Lack of information in the field, absence of uniformity in processes and practices among field offices and distributors, and manually-driven processes are typical factors in compliance failures. Employing a system like PINnacle Xchange to automate the processes with a compliance rule-base and automatic validations will address all of these underlying issues with a single solution.

Debbi Marquette: Insurance carriers need to ensure the integrity between what is created, filed and issued, and against which claims are assessed. Having an automated compliance process streamlines the time-consuming preparation for market conduct audits.

InSystems Tracker is the only compliance software application that automates the product development and state compliance filing processes, enabling P&C and L&H insurance organizations to bring new products to market faster, lower their operating costs, and reduce market conduct exposure and possible fines.

INN: How can insurers comply with federal regulations in a way that is least disruptive to their organizations?

Joe Pacor: Sarbanes-Oxley requires insurance companies to increase the timeliness, accuracy, and transparency of their financial reporting. Key provisions require companies to:

* Certify the accuracy of quarterly and annual financial statements and disclosures

* Design, establish, and maintain disclosure controls and procedures

* Evaluate the effectiveness of disclosure controls and procedures within 90 days of the report filing date and report on the effectiveness of the controls

* Indicate, in each periodic report, any significant changes in internal controls-including any deficiencies and material weaknesses that have occurred since their most recent evaluation

SAP solutions have built-in controls, internal control management, performance management functions, and financial reporting capabilities that, when used properly, provide many of the features a CEO or CFO needs to certify financial statements and internal controls under Sarbanes-Oxley.

Timothy Plunkett: Insurance carriers need to stick to what is core to their operations. Non core functions such as compliance reporting is best left to vendors who specialize in financial applications and are committed to always having the best of breed products. Using so called "Off the shelf" products is the best use of company resources and allows them to quickly upgrade and be current with the ever changing regulations.

INN: What do insurers have to do to avoid penalties for non-compliance with federal regulations?

Timothy Plunkett: Non-compliance has a monetary penalty, is a poor use of internal resources and affects the carrier's bottom line. Insurance carriers are best served by having the compliance function over seen by the corporate risk manager or compliance officer. By having a dedicated person the company can be assured that their risk management program is minimizing corporate exposure through use of technology, insurance and other non-insurance risk management measures.

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