The association is now kicking off a four-week recruiting period in which it will reach out to industry firms, asking them to sign up to be involved in the investigation project.
The project is expected to begin in September, and over a period of six to nine months, the eData Steering Committee, along with six sub-committees and the industry participants, will work towards developing a recommended model for the new industry framework. The proposals will then be presented to the industry for final endorsement.
The commitment that CLIEDIS is seeking from firms includes both a financial contribution and resources in the form of expertise and participation on the various subcommittees.
The financial contribution varies, proposed to be $45,000 for direct carriers, $7,500 for distributors, and $5,000 for service providers, associations and reinsurers. No financial contribution is required for system providers.
The most important role that participants will play is providing input throughout the investigation process, according to Scott Sinclair, chief operating officer at Transamerica and a CLIEDIS executive member. He said this input is critical in order to develop a system that reflects needs and realities within the industry.
\u201cWe require that expertise,\u201d said Sinclair, during a conference call on Tuesday. \u201cTheir biggest commitment in this is people, versus money.\u201d
Sinclair said he is \u201cvery confident\u201d that firms will be on board with the investigation project. He pointed out that at a CLIEDIS summit on the eData project that was held in Toronto in January, members of the industry were eager get the project moving.
\u201cWe received really overwhelming and resounding support,\u201d he said.
Jamie McGeachin, vice-president of operations at HUB Financial Inc. and a CLIEDIS executive member, agreed that industry support is strong, particularly within the MGA community.
\u201cThose that I have spoken to are very interested in this initiative,\u201d she said.
Many carriers are already beginning to use their own electronic data collection tools, but McGeachin said the industry would benefit from having a single system in place.
\u201cCarriers are going to move down this path anyway,\u201d she said. \u201cFrom a distribution standpoint, the centralization of this as an industry tool is incredibly helpful to us.\u201d
As CLIEDIS works to garner support, it is convincing companies that they\u2019ll enjoy \u201csubstantial benefit\u201d by signing up to participate in the eData project right away. The CLIEDIS proposal points out that participating organizations will be able to contribute to the shaping of the new industry framework. In addition, those who sign up at the beginning will enjoy preferred pricing compared to those who sign up later.
\u201cCompanies that take a \u2018wait and see\u2019 attitude will not only miss the opportunity to set the course, they will also realize a financial penalty,\u201d the proposal says.
Advisors must be on board, too<\/b>
A key challenge in the movement towards an electronic processing system is getting advisors to embrace it, according to Sinclair.
\u201cThere\u2019s a huge cultural shift that is happening all around us, but we also need it to happen with the advisor\/distributor groups \u2013 particularly the advisor groups,\u201d said Sinclair. \u201cAt point of sale, we need to be able to accept and adopt new ways of doing business. That is probably the most significant challenge that we have.\u201d
The CLIEDIS proposal outlines the benefits that advisors would enjoy under an eData system. These include: reduced cycle times, resulting in faster commission payments; higher placement ratios, potentially leading to increased sales; reduced time spent on paperwork and follow-ups, allowing for greater focus on sales; and reduced costs to start up in the industry; among others.
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