November 2008

Tim Meyer

Merrill Lynch

Annuity Straight Through Processing

E-Signature Process

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Business Case Increase capabilities for Annuity processing throughput

Annuity Sales $300-$600 million a month 500-1000 Annuity Applications a week

Signature upfront equals higher compliance for Distributor and Carriers No chance of marked up application Carrier is guaranteed to receive signed application Improve audit trail

Improved user experience Eventual integration with corporate portal where customers can

retrieve all financial paperwork

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Challenges Integration with third party Order Entry vendor Integration with corporate portal out of scope for initial phase

Current portal does not support electronic contract signing (lock\bind)

Project schedules Multiple signers

Require workflow A signer might not be a Merrill Lynch account holder

Allow for Opt Out Process Aggressive project schedule

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SolutionAfter evaluating several providers SIGNiX was chosen.

ASP Model for E-Signature Allows for a tactical deployment Met security, workflow, and NAVA STP standard requirements Flexible integration No capital expenditures Fits the Service Oriented Architecture (SOA) paradigm of

Straight Through Processing Existing Relationship with Merrill Lynch Strong knowledge of Insurance Industry

Very active within NAVA workgroups Past relationship with Order Entry vendor

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Annuity Straight-Through Processing

•Agent and Client meet and agree on an Annuity product.

•The Agent fills out the order information via an integrated third-party Annuity Order Entry vendor.

•Upon submit, the order goes through a compliance review process to determine the suitability of the sale.

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Annuity Straight-Through Processing• Upon completion of the Suitability process, the Annuity Document Package is securely sent from Order Entry vendor to Signix via a standard NAVA E-Doc message.

The Document Package that is generated by the Order Entry process consists of multiple documents, each of which may need signatures and must be signed in a designated order then bound and locked for transmission to the carrier along with the audit trail.

• Consents

• Replacement Disclosure Forms

• Application Form

• Allocation Instruction Form

• Exchange\ Rollover Form

• Rate Lock Request

• Policy Disclosure Form

• The workflow for the signatures is determined via the message contents and the first signer is notified via email.

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Annuity Straight-Through Processing

The email address field must be supplied for any required signer. This may include:

• Owner

• Joint Owner

• Annuitant

• Joint Annuitant

• FA

Note:

A required signer might not be a Merrill Lynch account holder.

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Annuity Straight-Through Processing

E-Sign Disclosure and ConsentMerrill Lynch

Consent for the Use of Electronic Records and SignaturesThis notice contains important information that you are entitled to know before completing this transaction electronically. After reviewing these disclosures, please indicate whether you agree to continue with the electronic process by clicking the appropriate option at the bottom of this page. If you have any questions, you can contact the Investment Products Services Center at 1-800-xxx-xxxx Monday - Thursday, 8 a.m. to 7 p.m. and Friday, 9:15 a.m. to 6 p.m., Eastern time. ScopeIf you consent to use the electronic application process, your consent applies only to the Annuities Replacement Disclosure Form transaction. This transaction consists of the Annuities Replacement Disclosure Form that will be presented in your web browser where you may sign it electronically. Paper AlternativeIf you prefer, you may conduct this transaction on paper instead of electronically. You may initiate a paper application by retrieving the form from our website www.ML.com or by contacting the Investment Products Services Center at 1-800-xxx-xxxxMonday - Thursday, 8 a.m. to 7 p.m. and Friday, 9:15 a.m. to 6 p.m., Eastern time. Cancellation of ConsentYou can withdraw consent at anytime by calling the Investment Products Services Center at 1-800-xxx-xxxx8 Monday - Thursday, 8 a.m. to 7 p.m. and Friday, 9:15 a.m. to 6 p.m., Eastern time. Signature ProcessMerrill Lynch has contracted with Signix, Inc. to provide electronic document signature and storage services. If you choose to sign your documents electronically, the following process will be applied: 1.Documents to be signed will be displayed in your browser. The line to be signed will contain the message "Click here to sign." 2.Click the signing line to begin the signing process. 3.A signing dialog will appear on the line you clicked to sign. Enter your secret signing credentials into the signing dialog, check the box confirming your intention to create a legally binding electronic signature, and click the Sign button. When you click this button, your electronic signature will be created on the document. This signature will have the same legal effect as your handwritten signature on paper. Shortly after you have signed, you will receive an email confirming creation of the signature. 4.The signed document is automatically submitted to Merrill Lynch for processing and no further action is required on your part. Hardware and Software RequirementsIn order to use the electronic process, you will need the following hardware and software: A computer with one of the following operating systems:

oWindows XP oWindows ME oWindows 2000 oWindows NT with Service Pack 6

Access to the Internet. A web browser (Microsoft Internet Explorer Version 6.0 or greater is recommended). Cookies and JavaScript must be enabled. An E-mail address and the capability to receive and read email. A printer, if you want printed copies of the electronic documents. Obtaining Paper Copies of Electronic DocumentsAfter you have signed the documents, you will receive an email confirming the creation of your signature. You may request a signed copy by contacting the Investment Products Services Center at 1-800-xxx-xxxx Monday - Thursday, 8 a.m. to 7 p.m. and Friday, 9:15 a.m. to 6 p.m., Eastern time, or by sending a written request to:Consent for Electronic ProcessBy selecting the "I Consent" option below, you agree to use the electronic Enrollment Application process described above, including the use of electronic documents and signatures. I Consent I Decline

Clicking on the link navigates the client’s browser to the e-contract safe harbor. The user is presented with the E-contract disclosure consent form which they must choose Consent or Decline to proceed. As an alternative the consent could be included as the first document for signature in the document packet. Either way, each signer must consent. Some signers may not be ML account holders.

Note: This is only a sample for demonstration purposes. The wording has not been vetted for compliance or correctness.

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Annuity Straight-Through Processing

• Upon navigating to the safe harbor site, the customer is presented with a disclose consent. This is the first possible opt out.

• The user is authenticated via several generated interactive questions.

A shared Secret could be used to establish the credentials of each signing party.This would be determined by Merrill Lynch. The first dialog box shows the user experience, the second, shows sample information to garnish questions/answersfor secure document delivery.

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Annuity Straight-Through Processing

The e-contract workflow engine now determines the next required signature and repeats the notification process by signaling to Merrill Lynch the next required signer context. Merrill Lynch can then send out the next email. The FA can be alerted via email of the status changes of the application as they are today. This includes status changes regarding signatures.

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Annuity Straight-Through Processing

After the final signature is gathered, the E-Contract vendor sends a Completed status message to the Annuity Order Entry system, the carrier signed documents via the DTCC, and the complete document package to Merrill Lynch. The document packages would also include the transaction log.

The Order Entry vendor would send the order data via the DTCC to the carrier as they do today.

Merrill Lynch systems would store the documents and transaction log in the existing Records Management system.

The carrier processes the Order data, stores the signed application, and issues the contract. The Client is mailed a New Application Package by the carrier.

At this point the transaction is considered complete.

EBIX Exchange E-Signature Vendor

Merrill Lynch Systems

E-SignatureCompleted Status

Signed

Docum

ents

Client

$

CarrierDTCC

New Application Package*

AppSub and Documents

Order

data

Signed

Documents

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Future

Phased rollout of carriers through 2009 Full Integration with ML Online for Outstanding Customer

Experience Provide for E-Contract signing of Annuity Applications

within ML Online Integrated Authentication Higher Security Standard

Delivery of New Annuity Application Package via ML Online E-Signature for In Force Annuity Documents

Partial Withdrawals