The document discusses options for re-engineering traditional compliance fulfillment approaches for variable annuity carriers. It describes the traditional "Big Book" approach, the "Mini Catalog" approach, and more advanced "State-of-the-Art" solutions. State-of-the-Art solutions can deliver portfolio-specific documents to customers, achieve substantial cost savings of 20% or more, and improve the customer and advisor experience by streamlining communications. While implementation requires investment, the savings from State-of-the-Art solutions can pay for themselves in a year or less. The document encourages carriers to consider re-engineering compliance fulfillment to realize these benefits.

1. Industry Insights into
Re-Engineering Your Traditional
Compliance Fulfillment Approach
for Cost Reduction and Greater
Customer Benefits
Transforming Compliance Communications
from Challenge to Differentiator
Managing Change and Complexity in a Dynamically
Evolving Industry
The variable annuity (VA) industry has always been one of the most dynamic in
financial services, responding to changes in tax laws, an explosion of investment
choices, innovative features and an ever-changing risk environment.
Current approaches to VA compliance communications, however, can pose
challenges for both the advisors distributing the product and the customers
trying to better understand their investment purchase. Key customer benefits
of the overall VA product can be lost in the deluge of complex compliance
communications that customers must weed through, a large part of which
relates to investments not even selected by the customer. Firms need to be
mindful of an emerging investor base of “New Consumers” that research1
shows
are defined more by shared values than by demographics. These 70 million new
consumers value sustainability and targeted communications, and are already on
the Internet.
All of these challenges create a major opportunity for innovative carriers who
re-think their compliance fulfillment to deliver a better customer and advisor
experience, while achieving substantial cost savings.
1 BBMG study, Unleashed: How New Consumers Will Revolutionize Brands and Scale Sustainability (March 2011)

2. Options Available to VA Carriers for Regulatory Fulfillment
The table below depicts three options available to carriers in meeting their regulatory compliance fulfillment needs: the traditional
“Big Book” approach, the “Mini Catalog” approach, and newer “State-of-the-Art” solutions designed to reduce costs, improve the
customer experience and help mitigate business risk associated with compliance communication obligations.
The “Big Book” A single book is created
with all of the required
information for all
investment options offered
in the product. The more
options, the greater the
page count and print/
postage costs associated
with delivery.
Only available if the
“Big Book” is comprised
of individually filed
prospectuses (i.e., not
submitted as a single multi-
fund filing on EDGAR).
Big Book approach used
for shareholder report
mailings (semi-annual and
annual reports).
State of the Art Investor disclosure
communications include
only those personal holdings
held by the recipient.
Subsequent regulatory
communications are only
sent to those customers who
need to receive the particular
document (i.e., no irrelevant
or redundant mailings).
Can achieve substantial cost
savings, as well as improved
customer experience, by
delivering these streamlined
“plain English” documents in
a portfolio-specific manner.
Two options available:
• Industry utility (as
leveraged in mutual fund
channel) wherein print
costs of shareholder
reports are transferred
to fund partners who
are typically obligated to
deliver these documents.
• Portfolio-specific printing
leveraging policyholder
data to digitally print on
demand books that
contain only individual
investor holdings.
The “Mini Catalog” Multiple smaller books are
created grouping subsets
of options based on usage
statistics. Customers with
two or three of the most
popular options may be sent
one small book. Others may
receive multiple books.
Not generally available due
to limitations on mixing
summary and statutory
prospectuses.
Mini Catalog approach
used for shareholder
report mailings (semi-
annual and annual reports).
Fulfillment Approach General Description Summary Prospectus Regulatory Mailings

3. One-time “blanket
mailing” doesn’t account
for prospectus updates
and supplements (i.e.,
only captures one point
in time).
”It’s the Devil that we know.”
Traditional approach requires
the least change.
Every customer experiences
massive over delivery – bulky
impersonal communications,
most of which are not
representative of their
individual investment
holdings (i.e., more
information than required).
Costs can be unwieldy,
particularly for products with
many investment options.
Available; however,
historically low (single-digit)
adoption by VA policyholders
has made this fulfillment
approach largely irrelevant
to date.
Ability to deliver portfolio-
specific documents and
the summary prospectus
reduces costs of
prospectus updates and/
or supplements. Also, the
ability to track delivery
history and monitor the
latest SEC filings on a
centralized database helps
to assure the appropriate
documents are delivered
for each new transaction.
Re-engineered approach
could significantly reduce
costs and offer fast ROI: A
minimum of 20% sustainable
long-term savings and
payback in Year One. Also
improves the customer
experience and advisor
productivity as summary
prospectus becomes a sales/
marketing tool that presents
streamlined information in
“plain English”. Potentially
improves compliance and
retains client control.
Achieving full benefits
requires organizational
commitment by the carrier
and their fund partners to
migrate to the new approach.
This can impact many
areas including Marketing,
Procurement, Operations and
Legal/Compliance.
Available and more
easily implemented
when combined with an
industry-compliant and
ESIGN-compliant consent
management approach, along
with an awareness program.
Industry utilities or “nextgen”
solutions to help accelerate
e-delivery rates leveraging
brokerage consent databases
are currently in development.
One-time “blanket
mailing” doesn’t account
for prospectus updates
and supplements (i.e., only
captures one point
in time).
Less costly than the Big
Book. Leverages offset print
which historically has been
perceived as the “most
cost-efficient” process.
Mini catalogs also are
“one-time” events and
can create a compliance
risk and result in over
delivery. Many customers
still receive multiple mini
catalogs, creating a customer
experience that can be worse
than a single Big Book. Cost
savings are limited as well.
Available; however,
historically low (single-digit)
adoption by VA policyholders
has made this fulfillment
approach largely irrelevant
to date.
Compliance Key Benefits Limitations E-Delivery

4. © 2013 Broadridge Financial Solutions, Inc., Broadridge, the Broadridge logo, and certain other marks are registered trademarks or service marks
of Broadridge Financial Solutions, Inc. NewRiver is a part of Broadridge Financial Solutions, Inc. All rights reserved. 199_NR_22
Take a Leap Forward
Leading carriers have already begun to re-think their approach
to compliance fulfillment, moving from a traditional Big Book
approach or an incrementally better Mini Catalog approach
to a state-of-the-art technology-based approach that can have
substantial benefits to the carrier. While implementation of
these solutions takes an investment of both money and human
resources, the savings can be so substantial that the conversion
can pay for itself in as little as a year or less depending on the
approach or partner you choose. Additionally, sustainable
ongoing savings of 20%, or even more, is certainly attainable.
And this is before you assign a value to the improved customer
and advisor experience of eliminating the current tide of
over delivery.
When you consider enhancing your traditional compliance
fulfillment approach with a more advanced platform, you will
want to incorporate several factors in your analysis:
• Strengths and limitations of your current approach to
compliance communications
• Available options
• Potential phasing strategies
• Adoption of the summary prospectus approach,
including website maintenance
• Expanding electronic distribution options and usage
• Cost savings targets, now and in the future
• Customer and advisor experience enhancements
• Ability to migrate legacy systems and accommodate
print, electronic and web outputs
• Implementation timeframe and resource commitment
• Leveraging a mature solution that incorporates client
business rules
• End-to-end reliability in regulatory compliance
• Review of third-party data security, business continuity
and disaster recovery plan
• Confirm financial stability of third-party provider to
ensure their longevity
• The ability to track fulfillment expenses for
chargeback opportunities
• Maintaining an archival of individual delivery histories
for reporting and auditing purposes
For more information, call Broadridge today at
+1 800 481 2331 or email BRIntelSolutions@broadridge.com.
About Broadridge
Broadridge Financial Solutions, Inc. (NYSE:BR) is the leading
provider of investor communications and technology-driven
solutions for broker-dealers, banks, mutual funds and
corporate issuers globally.
Visit us: broadridge.com