To those questioning whether standards truly make a difference in our ability to function efficiently in the insurance industry, imagine a world without any. Like a congested intersection without benefit of traffic lights, chaos is bound to ensue.Agreed-upon standards embody the ultimate in collaboration: technical, personal and political. Their development requires agreement across disparate areas and agendas, yet those hard at work in their creation tend to ebb and flow with the technology requirements of the industry and focus on the promise of a win-win for all involved.

Such is the case for many standards-making bodies, but especially for the Association for Cooperative Research and Development (ACORD), the New York-based not-for-profit insurance data standards association.

Although ACORD has 35 years of work under its belt in the development of efficiency-related standards advancements for insurers, namely in the common classifications used for application and supplemental forms, most of the organization's high-level growth has occurred in the last 10 years.

"We've experienced a lot of organic growth," says Denise Garth, vice president of membership and standards at ACORD. "And we've broadened and deepened our perspective of what standards can do and where that growth is particularly meaningful."

ACORD introduced its ACORD Extensible Markup Language (XML) for Life Insurance standards in 1998 as the industry focused its efforts on top-line growth, and by 2001 "we had XML across all lines of business," Garth says.

After 2001, the market dynamics and associated focus changed from one of grabbing new market share to maintaining existing books of business. Embraced by carriers, agents and vendors, ACORD's standards development rapidly accelerated from forms to e-forms.


"We started with paper, and from that built static PDFs," says Ron Dudley ACORD's vice president, forms. Four years later, static PDFs became fillable. And earlier this year, ACORD launched eForms+, a system built on top of IBM's open standards-based technology.

"With the recent launch of E-forms+, efforts are geared toward giving member companies the ability to extract data from these forms, and parse it into individual components," Dudley says.

IBM and ACORD are teaming to enhance the library of ACORD forms to generate XML data, which will be based on ACORD eLabels. Carrier members that implement IBM's software can submit and receive forms electronically, and carriers can extract the XML data and leverage it across back-end systems, adds Dudley.

Among the forms' enhancements, says Dudley, the removal of boxed overflow restrictions is a particularly compelling reason to adopt the new forms.

"In a typical auto application, the form provides boxes for information on four drivers," he says. "What if you have six? The new forms remove box space restrictions, so if a user goes over the visible space allowed, the form automatically expands to accommodate their needs."

The goal is to enable bi-directional work, so if the agent fills out a form and sends it to a carrier or third-party solution provider, they can extract the data, work with it, repopulate the form and send it back.

"This level of functionality wasn't possible a year ago," Dudley says.


That accomplishment speaks to one of ACORD's major goals for 2007, says Dudley; namely, continuing standards development efforts within and across domains.

"The ultimate goal is to be able to provide straight-through-processing (STP) of key transactions," he says, "which will reduce the lag time associated with paper exchange and expedite core insurance processes such as policy applications and claims management."

It's a given that XML has become a valuable form of technology for exchanging information with internal and external data partners, but, according to Garth, the path taken by ACORD and its use of XML is broader still.

"Historically, we were perceived to be working on communication between the agent and carrier," Garth says, "but we are finding a lot of companies that are discovering that standards lend themselves to internal integration of systems."

This internal integration is possible with the advent of service-oriented architecture (SOA) and associated Web services, says Garth, who points to the carrier currently running five or more legacy policy administration systems as an example of where the application of this technology has the potential of seeing the greatest success.

"If all admin systems do licensing and appointments, the insurer can use an ACORD standard, create a Web service for licensing and appointments, and link all the systems so they do it consistently," she says. "There is huge value for carriers beginning to link legacy systems and develop internal systems that connect to the back end. They are finding that this is suitable for the backend for claims, not just the front end."


Yet another unique approach to XML standards implementation is in the creation of an straight-through processing (STP) workflow - with a front-end focus - to best support sales process and boost sales across all lines of business.

"NAVA is using ACORD standards to get to that common process," Garth says, "and it will include components such as electronic signatures."

NAVA, a Washington, D.C., non-profit association that focuses on insured retirement solutions, is spearheading an STP initiative to establish a comprehensive set of standards for simplifying and improving the electronic annuity purchasing process for consumers, insurers, distributors and regulators.

The goal, according to Rob Dearman, assistant vice president of Jackson National Life (and self-professed "poster child" for the NAVA initiative), is to create a set of operational standards for a process that is paper-free, garner regulatory acceptance of the process and assist the industry in STP standards implementation.

"In our increasingly regulatory environment, the current manual processes just won't cut it in terms of the growth we expect in annuities sales," he says. "From the point of sale perspective, it's currently a very labor-, time- and paper-intensive process. Plus, we have a host of regulatory reporting requirements with these types of transactions."

NAVA's member companies Allianz Life Insurance Co., The Hartford Life, Pacific Life Insurance Co., Transamerica Life and Wachovia Securities are part of a larger STP executive council currently in collaboration to create the standards.

Standardizing on electronic forms represents a huge portion of the work completed by carrier members, says Dearman. "We didn't want to start from scratch so NAVA reached out to several other bodies, such as New York-based Depository Trust & Clearing Corp., to help facilitate fund transfers that are automated and standardized, and we have been working with ACORD, which has its own separate annuities group," says Dearman. "Our focus is presenting our standards in a technology-agnostic way-non-vendor specific. We wanted to leverage existing standards."

The STP initiative, which will cover all types of annuities-deferred and immediate; qualified and non-qualified; and variable, fixed and indexed-will address other key areas, such as suitability, electronic forms, privacy and records management.

Garth says she believes the future of standards development lies in a multi-faceted approach that includes a focus on high-level business processes, unified messaging, and continued work on a single logical data model (using work completed on the ACORD dictionary) that people can reference and use to understand different components of data. Ultimately, the organization will define business process service definitions that are standardized for an SOA environment.

"The dynamics of the marketplace are changing," concludes Garth. "People are looking at how best to differentiate themselves."

ACORD members such as State Farm, Allstate and Nationwide appear to be differentiating themselves not simply by whether they use a data standard, but by how they use it, adds Garth.

"At the end of the day, it's all about the data," says Garth. "This is reflective of a message, a data model, or a service definition. We want to offer our members the framework by which they can plan strategically and the flexibility to leverage their current technology and standards implementations. Plus, we want them to be able to do this at an enterprise level, via SOA or Web services."

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