THE PROBLEM: How to validate and reconcile policies in a compressed timeline
A major financial services company with a statutory surplus of over $2B in 2008 sold their group health insurance business, including the associated Facets administrative system license, to a third-party administrator (TPA). The life, AD&D, STD, LTD, dental, and some health business was retained, forming a third-party administration agreement allowing the originating company to continue group administration processing on the TPA-owned Facets system. The originating company retained approximately 5,000 policies with roughly 1 million member lives, of which approximately 1,300 policies were to be non-renewed. The objective was to convert the remaining 3,700 life, AD&D, STD, LTD, and dental policies to a new COMPASS administration system. Upon completion of the conversion and non-renewal process, the third-party administration agreement would terminate and the originating company would no longer have access to the Facets administration system. Facets was scheduled to be decommissioned in the fall of 2009. Key to the success of the conversion was minimizing impact on the policyholders.