Pacific Life chose StarCompliance for the adaptability of its software, intuitive user interface and dedicated support services – helping this FORTUNE 500 company to simplify and improve its regulatory compliance processes.
Client Profile: Celebrating its 150th anniversary in 2018, Pacific Life provides a wide range of insurance products, annuities, and mutual funds, and offers a variety of investment products and services to individuals, businesses, and pension plans. Pacific Life counts more than half of the 100 largest U.S. companies as its clients. (Client count as of June 2017 is compiled by Pacific Life using the 2017 FORTUNE 500® list.)
Locations: Headquartered in Newport Beach, California, with offices in Aliso Viejo, California; Omaha, Nebraska and Lynchburg, Virginia.
Pacific Life was looking for a new technology platform to replace an in-house custom system used for compliance disclosures and a proprietary software system used for trade surveillance. Support for the in-house disclosure system was coming to an end and the company wanted to move to a cloud-based solution for its compliance system.
The corporate compliance team at Pacific Life selected StarCompliance from the three proposals it considered for its new compliance system. They particularly liked the intuitiveness of the STAR interface and the ease of navigation for end users. They were attracted to the clean, modern look and feel of the system and the raft of administration options it offered. The STAR application also offered scope for extensive customization, meaning it could be adapted to suit the needs and working practices of Pacific Life and its subsidiaries. In addition, the StarCompliance team took time from the outset to understand Pacific Life’s specific requirements and ensure the proposed STAR solution met the client’s needs.
“We felt very comfortable with the people we worked with at StarCompliance, and we built good rapport. They were very quick to respond to queries and offer solutions. We could see that both the service and the technology were very good, and would give us a compliance system that was easy for our employees to use.” — James Balbas, Compliance Supervisor, Pacific Life
The implementation process began with a requirement-gathering exercise involving Pacific Life compliance and IT representatives. StarCompliance specialists then spent several months working with the team to configure the system and set up an initial test environment.
The STAR application was launched in two phases. Phase one had to be completed before support for Pacific Life’s existing compliance disclosure system ended. This phase saw the introduction of code of conduct self-certification and broker-dealer disclosure systems, along with gifts and entertainment and outside business activity reporting. The biggest challenge for phase one was to integrate Pacific Life’s complex HR system with the STAR application. As one of the largest insurance companies, Pacific Life’s employees included people with a whole range of regulatory backgrounds and obligations, including around 800 people registered with broker dealers, around 300 access persons requiring different levels of access to different information, and another tranche of people in its reinsurance business who were not recorded in the main HR system. Integrating HR systems with this level of complexity required a significant degree of customization in the STAR solution, ensuring the various disclosure and self-certification forms created for each individual were relevant and accurate.
Phase two involved the introduction of the StarCompliance Personal Trading product for employee trade disclosures. This required extensive customization for Pacific Life, building in personal trading rules which included different codes of ethics for each of its investment advisers. It also involved getting all broker feeds set up online. Despite this complexity, the system was successfully launched to end users with broker feeds in place by the agreed date. A few initial quirks were quickly ironed out by StarCompliance, and the company now provides continuing support and account management services to the Pacific Life compliance team.
“We worked very closely with our StarCompliance business analyst, who supported us to ensure we were ready to go live on the cut-off date for phase one. As a result, the system was in place ahead of our annual business-wide code of conduct certification round. Phase two was handled equally well by StarCompliance and the launch was smooth and well executed.” — James Balbas, Compliance Supervisor, Pacific Life
Pacific Life chose the certification and attestation function of the STAR system to manage its code of conduct certification and broker dealer disclosure collections. StarCompliance worked with Pacific Life compliance and IT teams to understand their complex requirements, and was able to develop a ‘master’ certification system which covered disclosure and certification requirements for all employees. It enabled the relevant disclosure components for each employee to be automatically populated on each individual’s disclosure form. This included outside business activity and conflict of interest declarations for relevant personnel. This single certification system for the whole business introduced significant efficiencies, ensuring each employee received a disclosure or self-certification form tailored specifically for their role and responsibilities.
Using STAR enabled the compliance team to automate this process for its more than 3,600 employees, saving considerable time and resources over managing the process manually. Reminders are automatically sent out to ensure staff complete the forms on time, with no need for manual intervention from the compliance team.
Pacific Life’s most complex requirement for the STAR application was to manage its trade surveillance activities for registered representatives of its broker-dealer and access persons of its investment advisers. The company introduced the Personal Trading product from STAR to assist in its regulatory obligations. This product enables automated review for some pre-clearance trade requests, with alerts sent to the compliance team when further review is required. The system assesses requests against established pre-clearance rules and in some instances can give the user an automated permission or denial to proceed. Any requests that require investigation or review are escalated to the compliance team, enabling its specialists to devote their time to dealing with issues that demand their expertise and judgement.
“By customizing a disclosure and self-certification system to meet the unique needs of our business, Star Compliance was able to significantly improve the efficiency and accuracy of our certification process. It gave us a versatile platform to automate the management and delivery of our complex regulatory declaration requirements.” — Suzanne La Roque, Director of Compliance, Pacific Life
The STAR system has introduced significant efficiencies for the Pacific Life corporate compliance team, made the process of following compliance procedures and completing compliance documentation much more straightforward for employees, and enhanced the company’s ability to fulfil its regulatory obligations.
Completion rates for quarterly code of ethics certifications have improved. The single sign-on function of the STAR application has helped to achieve this, by making access to the compliance system so easy. Employees do not have to sign in to a separate compliance system to complete their forms or submit pre-clearance requests. Every function of the STAR application can be accessed in one place, so employees can more easily find everything they need.
Pacific Life uses the reporting and management information capabilities of STAR to automatically export data for scheduled monthly and quarterly reporting to internal business clients. This has simplified reporting processes and saved time by reducing the need to manually configure data and to create and issue reports. The system is also used to raise alerts, so that any issues can be dealt with as soon as they arise, rather than waiting until scheduled reports are issued.
“Feedback from people using the system has been very positive. Employees have been very happy with the ease of use of the system. They like the fact that it’s easy to access whenever they need to use it, no matter where they are working.” — James Balbas, Compliance Supervisor, Pacific Life