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D A T A

M A I L

S O F T W A R E

A guide to Part VII mailings February 2012

Copyright: This document is copyright Forth Communication Limited. No part may be reproduced without Forth Communication Limited’s written agreement.


Contents (For quick reference, click on any of the items in the contents list below to go straight to the relevant topic.) Introduction .......................................................................... 2 Background ........................................................................... 3 Key dates ............................................................................. 4 Pack contents ........................................................................ 5 Outer envelopes ..................................................................... 5 FAQ/Legal Notice/Scheme Summary ............................................. 5 Letter Layouts ....................................................................... 5 Web ready documents .............................................................. 5 Other documents .................................................................... 5 VAT mitigation ....................................................................... 6 Production ............................................................................ 6 2-stage production .................................................................. 6 Overseas .............................................................................. 6 Spreading the production risks .................................................... 6 Attention to detail and economies of scale ..................................... 6 Production management ........................................................... 7 Braille, large print and audio ..................................................... 7 Data ................................................................................... 7 Overseas analyses for Witness Statements ...................................... 7 Data security standards ............................................................ 7 Data consistency .................................................................... 7 Data transfer ......................................................................... 8 Data management ................................................................... 8 Data processing and pdf proofing ................................................. 8 Data reconciliation .................................................................. 9 Mailsorting ............................................................................ 9 Ongoing business .................................................................... 9 Notification of deaths ............................................................... 9 Database & tools for response management .................................... 9 Database for outsourced response handling ................................... 10 Database for the court hearing .................................................. 10 Press advertising ................................................................... 11 Goneaways handling ............................................................... 12 Appendix: Extract from FSA Handbook Ch. 18 ................................ 13

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Introduction Part VII of the Financial Services and Markets Act 2000 and Chapter 18 of the FSA supervision manual (SUP 18 - http://www.fsa.gov.uk/pubs/other/aviva/ chapter_18.pdf ) regulate the control of business transfers, including life insurance, general insurance and banking transfers. The transfer may involve the takeover of a company or portfolio of business by another company, or the amalgamation of businesses/portfolios within the same company or group. A transfer needs to be sanctioned by a UK court, and there are onerous requirements for the applicant to publicise its proposals and notify the FSA and any party likely to be affected by the transfer. This guide is intended as an aid to those responsible for the communication with policyholders and other third parties requiring notification under a Part VII transfer. It contains knowledge gleaned from a succession of successful Part VII mailing projects since 2006. For further information or to give feedback the reader is invited to contact any of Forth’s Part VII managers: richard.bolton@forthcom.co.uk

0131 625 8383

barbara.parkins@forthcom.co.uk

0131 625 8380

stephen.johnstone@forthcom.co.uk

0131 625 8386

graeme.smith@forthcom.co.uk

0131 625 8387

There is also a LinkedIn group for sharing Part VII contacts and information: Go to “FSMA-Part-VII-Group” at http://www.linkedin.com/groups

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Background Forth has produced 6 Part VII projects between 2006 and the end of 2011 with 2 more in planning for early 2012. •

Projects

6

Clients

5

Total packs mailed

8.4m packs

Largest project

3.8m packs

Highest mail-out per week

470k packs

Our Part VII team includes: •

Project managers

Data managers

Data processors

Graphic designers & artworkers

Software developers

Print production managers

Cost controllers

Working closely with client-side Part VII specialists, we allocate to each project an experienced project manager and data manager for its entire duration, along with named deputies.

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Key dates Production has to fit in with key legal and other dates agreed with the FSA. A typical timetable includes: Weeks pre Scheme Hearing

Activity

-32

Timetable to FSA for review

-24

Draft scheme documents to FSA

-16

Notify EEA regulators

-15

Final scheme documents to FSA

-14

FSA initial report

-14

File court application

-13

Court Directions hearing

-13 to -11

Commence communications to affected parties

-9

Last date for policyholder notification

-3

IE supplementary report

-2

FSA solvency certificates

-1

FSA final report

-1

File final evidence

0 +2

Final court Scheme hearing Scheme effective date

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Pack contents Outer envelopes There will be Mailsort 3, second class and overseas air mail versions. Possibly separate versions for Ireland and other countries where volume dictates. Daily mailing volumes can be matched to the capacity of call centres to handle response rates. We can tailor mailing volumes to cover the longest mailing span or to maximise postage discounts as required. To maximise this we can produce a 2nd class batch to reduce the delivery time for the final week, so moving the final mailable date closer to the final allowable delivery date. FAQ/Legal Notice/Scheme Summary Set up artwork templates based on the first drafts and allow adequate space for the summary IE report that is usually latest to arrive. The process is then to have artwork facilities available to immediately re-proof for each set of changes notified. This will be an ongoing process up to the court Directions hearing. It requires a high level sponsor client side with the authority of the board to enable meeting the fixed deadlines. Letter Layouts There can be many individual letter versions, making the layout and approval of the letter layouts a major undertaking. To offer maximum flexibility we recommend full lasering of the letters, that can include mono logos, on blank stock (ie no preprint). A preprinted colour logo can be included if stationery is common to the bulk of letters, but often there are multiple variations of logo where funds from disparate brands are being merged. There can be various Agents notifications, and Third Party Claimant letters. There are often foreign language translations as well as Reinsurer, Outwards Reinsurance Broker and Inwards Broker letters. Web ready documents On final approval of the layouts and pre-print, web-ready versions can be supplied for uploading to the client’s scheme web pages. Other documents Specific additional leaflets such as Channel Island variations can be added either through segregation of data into batches or by selective enclosing equipment.

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VAT mitigation HMRC allows a package test that can give a favourable treatment of “Packages consisting entirely of items printed on paper or card”. Through our work predominantly with financial services companies that cannot fully recover input VAT,we have years of experience in minimising the VAT charge on mailpacks and ancilliary services. Please ask for our booklet “A direct marketer’s guide to the VAT rules”.

Production 2-stage production Often the desired mail-out start date is immediately after the Directions hearing at which last minute changes to documentation could be required. To accommodate this, print and begin to produce quantities sufficient for just the first week. Should there be no changes then mailing can start immediately, and if changes are ordered then the cost of reprint is minimised. In this scenario we recommend including only one variety of documentation in the first week’s mail-out batch. Overseas Overseas batches are generally small but due to the longer delivery time they are mailed out early in the schedule. We use an overseas mail consolidator for minimising the postal costs. Spreading the production risks Letters are created from files of print ready PDFs created by Forth. This concentrates the process of data manipulation and proofing at Forth and enables us to distribute laser production at more than one site, increasing the safeguards for the client should one supplier have production issues. For very large mailings clients have the option of allocating the physical production between 2-3 subcontracted producers. Additionally Forth operates its own production facilities capable of handling all the smaller volume batches, particularly overseas and sweep-up packs. Attention to detail and economies of scale Large volume printers, especially those with continuous lasering from reels, are best suited for the larger batches, typically over 50,000 packs. These offer the lowest cost due to economies of scale and logical processes. However they can lack the incentive and attention to detail required for the smaller sheet fed production runs, so we look after those at our own inhouse facilities where images go straight from our data processing unit to our laser/enclose/mail-out department.

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Production management The Work Control document consists of several spreadsheets that encapsulate the bulk of the information required to oversee the project, and is an essential focal point for client, Forth and subcontract suppliers alike. Work Control content: •

The mailing matrix – displays for each data provider the logical production batches, their quantities, contents, VAT status and weight.

The daily mailing schedule – shows for each batch for each data source the total, weekly and daily mailing quantity. As the project progresses, planned quantities are overwritten by actual daily mail quantities posted.

The mailing schedule shows all the key production dates for data and proofing with a history of the movements in the schedule.

The artwork schedule shows all the key production dates for artwork with a history of the movements in the schedule.

The technical specification sets out the specific details agreed with the client and is part of the brief to subcontracted suppliers.

The mailing reconciliation completes the proof of postage quantities per postal documents back to the counts of data supplied for lasering.

Braille, large print and audio The main mailing includes an offer to provide for these client needs, and fulfilment procedures can be set up and managed by Forth (using Scottish Braille Press or equivalent).

Data Overseas analyses for Witness Statements An overseas analysis is usually needed for the Witness Statements. Our autoDP routines coupled with staff evaluation of rejected records can reliably append country to your address records. We can provide analyses in any format you may require – eg worldwide, EEA and Channel Islands – and files of records for any specific country or region. Data security standards Forth and any subcontracted producers are certified under data security standard ISO 27001. Data consistency Significant work is required to determine what groups of policyholders are in scope and therefater the quality of data extracted and processes such as deduplication will influence the success of the outcome.

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Data usually is brought together from various sources for a Part VII mailing. It is important that all data providers are briefed consistently to provide data in as near to a common format as possible. This leads to consistency of content, safety from errors and ease of proofing and approval and can provide cost savings through economies of processes and scale. Data transfer We provide an SFT web site for the secure transfer of data between the various data providers, ourselves and the production facilities. Each file received is checked and recorded in a Data-In Register that is sent to the data provider for confirmation. It confirms completeness of transfer by recording file name, date, record count and first and last reference. Email confirmation of the receipt and transfer of data can be sent automatically to any email addresses that you require. Proofing files are also passed through the SFT. Data management We produce a brief in advance detailing all data manipulation requirements completely and unambiguously. It is approved by the client and used as the brief for the programmers. Typically it includes: •

The common record layout (mapping any variations per data provider)

Data schedule of key data dates

Raw data file list (names, quantities, comments, references)

Data processing instructions (file amalgamation, deduplication, suppressions, case conversion, proofing requirements, sequence coding, mailsorting, other production specific requirements)

Output batches (batch splitting and naming)

Scripting instructions (marked up visuals, signatures, lasering codes, window position, page size, other lasering instructions)

Data processing and pdf proofing On receipt, test and live files are subjected to standard data quality checking. We report back on key statistics and question any unusual observations such as unpopulated fields, poor addressing, lack of title fields, duplication etc. All permutations of letters, and data from all source files, are proofed. Each source data provider will wish to ensure the quality of their own data and check proofs of their own data, and the whole approval process has to be strongly centrally managed.

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Data reconciliation Part VII mailings are classed as “100%” mailings in the same way as policyholder statement mailings. This means that every record supplied has to be tracked and accounted for by reconciliation. The reconciliation has to persist through file amalgamation, deduplication, suppressions, batch splitting, removal of undeliverables, adding seeds and additional record files. In addition to reconciliations we supply files of raw data records with the mailing or suppression batch reference appended to each record. This lets the user see the fate of each record supplied, in case of an individual enquiry. Mailsorting Postage can be a significant cost so we seek out maximum postal discount by maximising batch sizes and direct selection mailsortation. Downstream access providers such as TNT and UK Mail can be used in place of Royal Mail although they are not yet competitive against Mailsort 3. Ongoing business Where relevant business continues to be written after the main data extract date, regular sweep-up Part VII mailings can be sent, and the details added to the mailed database. Notification of deaths Data may have been extracted several weeks before the end of the mailing schedule. During the mail-out span the client will provide weekly lists of death notifications. The cumulative list can be checked against the entire mailing file. Four outcomes possible – pack already mailed, pack about to go but too late to extract, pack/data found and suppressed and record not found in data. An exact reconciliation is provided for each list of death suppressions.

Database & tools for response management Typically there might be as many as 2% of the recipients making enquiries, requests, complaints or objections about the Part VII scheme. Of these the bulk (around 85%) will be BAU – who may not remember that they had a policy, advising name/address change, requesting cancellation or valuation etc. The FSA requires a robust procedure and audit trail for responding to enquiries from third parties triggered by Part VII scheme announcements. This can be achieved effectively by using Forth’s Part VII database tool. A database is loaded with the contact details of all those to whom the announcement mailing has been sent. Response staff access the database on line and can find the record of any caller and record details of the nature of

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enquiry and response. Daily lists can be extracted for follow up action, and overall summaries produced for the FSA to show that enquiries have been suitably attended to. The database tool is flexible and can be adapted to a client’s needs. Currently the CRM module includes registering contact notes as: Transfer Enquiry

Technical Enquiry

BAU Enquiry

Technical Papers Request

Reprint Request

Translation Request

Non-trf Policyholder Enq.

Objection

Complaint

Request for Audio

Request for Braille

Request for Large Type

Request for Duplicate

Action Resolved

Other

Notes can be filtered by note type and by date and lists provided as evidence of action taken. After the initial announcement data files have been added to the database there will be subsequent sweep-up mailings that will be added in for completeness. A percentage of mailed packs will be returned by Royal Mail undelivered. Flags will be added to the database to record these as “goneaway” registering proof that the client met its obligations despite the pack not reaching the intended recipient. Database for outsourced response handling When an external call centre is engaged Forth can provide an indexed data extract as the look-up for caller details. Database for the court hearing Interested parties have the right to appear at the hearings and make representations. The database and a portable laptop version can be used to verify the right of any individual to be heard, and the contact notes and goneaways flag can help to verify any objection on grounds of nonnotification.

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Press advertising Press advertisements should appear on the day the notification mailing starts being despatched. A typical UK list might be: Financial Times

Regional Gazettes (London, Belfast, Edinburgh) (Mandatory)

Times

International Financial Times

Plus 2 national newspapers in any countries where the client has been significantly active, eg: Ireland

Irish Independent

Irish Times

Norway

Dagens Naeringsliv

Aftenposten

Italy

La Stampa

Corriere Della Sera

Spain

El Mundo

Cinco Días

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Goneaways handling Forth will receive and capture details of goneaways from the UK section of the mailing. Allow for anywhere between 2% and 3% of mailed volume, depending on your data housekeeping quality. Where there are significant separate mailings in overseas countries we set up a receiving address and goneaways can be freighted back or details captured locally by a client’s office. For the ROI packs, Forth has engaged the assistance of a local company in Dublin who receive the goneaways on Forth’s behalf and then forward to Forth Bangor for capturing on a regular basis. Letters will have a barcode lasered above the name and address, visible through the window of the outer envelope. On receipt of goneaways, this barcode is scanned at Forth Bangor and the record flagged as goneaway. We supply weekly reports and data dumps, and will store packs for security disposal at project end.

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Appendix: Extract from FSA Handbook Ch. 18 This extract focuses on the communication aspects of the FSA guidelines. 18.1.3 These regulations set out minimum requirements for publicising schemes, notifying certain interested parties directly (subject to the discretion of the court), and giving information to anyone who requests it. 18.2.3 Under Principle 7, a firm must pay due regard to the information needs of clients. The extent and nature of the information provided to consumers about a proposed scheme will therefore be a factor for the FSA in determining its attitude to the scheme. 18.2.12 ...the scheme promoters should discuss the scheme with the FSA as soon as reasonably practical, to enable the FSA to consider what issues are likely to arise, and to enable a practical timetable for the scheme to be agreed. 18.2.42 ... unless the court directs otherwise, notice of the application must be sent to all policyholders of the parties. It may also be appropriate to give notice to others affected, in particular to: (1) reinsurers of the transferor where it is proposed that benefits or liabilities under their contracts should pass to the transferee; and (2) anyone with an interest in the policies being transferred who has notified the transferor of their interest. 18.2.43 ...notice of the application must be published in: (1) the London, Edinburgh and Belfast Gazettes; and (2) unless the court directs otherwise, in: (a) two national newspapers in the United Kingdom; and (b) in two national newspapers in any other EEA State that is the state of the risk or the state of the commitment. 18.2.44 The regulations require that the FSA approves in advance the notices sent to policyholders and published in the press. 18.4.46 The FSA is entitled to be heard by the court on any application for a transfer. A consideration for the FSA in determining whether to oppose a transfer would be its view on whether adequate steps had been taken to tell policyholders about the transfer and whether they had adequate information and time to consider it. The FSA would not normally consider adequate a period of less than six weeks between sending notices to policyholders and the date of the court hearing. Therefore...consult the FSA on its views about what waivers might be appropriate and what substitute arrangements might be made. The FSA will take into account the

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practicality and costs of sending notices to policyholders ...the likely benefits for policyholders of receiving notices and the efficacy of other arrangements proposed for informing policyholders...A firm may not be able to send notices to some or all of its policyholders, because it does not have their address. 18.4.13 Schedule 15 to the Friendly Societies Act 1992 requires a statement to be sent to every member of a friendly society entitled to vote on a transfer or amalgamation.

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D A T A

M A I L

8 John’s Place Leith Links Edinburgh EH6 7EL

Unit 2b, IT Centre 2-4 Balloo Avenue Bangor BT19 7QT

T 0131 467 4467 F 0131 467 4004

T 028 9147 3598 F 028 9147 3613

E info@forthcom.co.uk

www.forthcom.co.uk

S O F T W A R E


Part VII Guide to Production