Technology & Digital Tools Flashcards

What is 'digital onboarding' in the annuity industry?

Answer: The electronic process of gathering client information and completing new annuity applications

Digital onboarding refers to the electronic collection of client information, suitability data, and application completion for new annuity policies.

How do most annuity carriers use predictive analytics in their underwriting and pricing processes?

Answer: To analyze mortality, longevity, and interest rate data to set product pricing and reserves

Carriers use predictive analytics on mortality, longevity, and interest rate trends to accurately price annuity products and maintain adequate reserves.

A client receives a phishing email that appears to be from their annuity carrier requesting login credentials. What should the advisor instruct the client to do?

Answer: Ignore the email, not click any links, and contact the carrier directly using official contact information

Clients should never click links in suspicious emails and should contact the carrier directly through verified channels to report the phishing attempt.

Which regulatory body has issued guidance specifically addressing the use of artificial intelligence and algorithms in insurance and annuity sales recommendations?

Answer: The National Association of Insurance Commissioners (NAIC)

The NAIC has issued model guidance and bulletins addressing the use of AI and algorithms in insurance recommendations and suitability determinations.

What is the main advantage of using a carrier's e-application system over a paper application for annuity sales?

Answer: E-applications reduce not-in-good-order (NIGO) rates and accelerate policy issuance

E-application systems include built-in validation that catches missing or inconsistent information, reducing NIGO rates and speeding up policy issuance.

An advisor wants to store annuity client records in a cloud-based system. Which factor is most important when selecting a cloud provider?

Answer: The provider complies with financial services data security and privacy standards (e.g., SOC 2, encryption at rest)

For financial services, cloud providers must meet rigorous security and compliance standards such as SOC 2 certification and encryption at rest to protect client data.

What is the purpose of an 'audit trail' feature in annuity transaction and compliance software?

Answer: To create a timestamped record of all actions, changes, and approvals for compliance and dispute resolution

Audit trails provide a chronological, tamper-evident log of every action taken on a client account, supporting compliance review and resolving disputes.