Agent/Broker Compensation System for the 401k Pension Administration Market
Business Problem:
A major insurance company participating in the 401K market desired a solution to manage compensation payments to multiple sales channels on a growing base of over 3000 plans. The insurer pays producer compensation based on many types of financial activity which are processed in a mainframe contract administration system and is responsible for issuing compensation checks on multiple payment schedules.
The insurer was experiencing problems with its current operation. Service to producers was poor because payments were late or incorrect and detail was not readily available to the producer. Accounting and balancing functions were manually intensive. The current system required a significant amount of duplicate data entry, was unstable and not scaleable.
The insurer’s desire was to build an application that would have the following characteristics:
- Provide better customer support to producers with timely payments for the correct amount and fully described.
- Eliminate duplicate entry through integration with the insurer’s legacy systems – Contract Administration, Producer Licensing and Accounting
- Improve system availability
- Manage the producer base of 15,000 producers
- Provide capability to easily add additional products
Solution:
RESolutions Consulting developed a fully Object-Oriented business application designed for the purpose of managing all aspects of compensation calculation and payment. System functionality included:
- Compensation Process
- Contracts are created with any user-defined set of compensation rules. Each type of compensation may be split independently between any number of producers. On a user defined schedule compensation is calculated and paid based on a set of user defined rules.
- Producer Management
- Multi-level producer organizations and supervisory arrangements. Territories can be created and management assigned for complete organizational structure.
- Interface to Enterprise Applications
- Controlled exchange of information with Contract Administration, Producer Licensing and General Ledger minimize the need for data entry. Processing reports provide end user verification of results.
- Audit Capability
- Ability to dynamically change the business rules and track the history of the changes for future review/audit purposes.
- Ad-hoc Reporting user can easily create reports outside the normal production reporting environment.
- Unparalleled Security
- Highly flexible and user-specific security features allowing for customized system security controls at the application, data, user interface and organizational levels.
Return on Investment (ROI):
The following is a partial list of the ROI achieved by the insurer:
- Compensation calculated and paid in one cycle, eliminating the need for manual reconciliation in the previous multi-cycle process.
- Contract set up can be completed without re-keying data, reducing workload and costly errors.
- Reduction in producer inquiries, because statements show complete details.
- Eliminated errors in accounting caused by manual data entry.
- Reduced workload for compensation team by providing secure access to data by sales and marketing area.
