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VENDOR DUE DILIGENCE AND BEST PRACTICES STANDARDS ASSESSMENT
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CRITERIA
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WHY? /
BEST PRACTICES
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M BENEFIT SOLUTIONS’ STRENGTHS
AND CAPABILITIES
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ORGANIZATIONAL STRUCTURE AND EXPERTISE
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| Business Experience
and Reputation |
In a complex technical industry with a
steep learning curve, vendor reputation
is important. |
A stable, four-decade history and emphasis on
customer service reflect a long-term commitment
to clients. |
| Depth, Caliber,
Continuity of Staff |
A BOLI service provider’s staff should
possess both the depth and breadth of
technical expertise required to perform
all functions at the highest levels |
Specialists include experts in tax, accounting, law,
insurance, actuarial science and finance, with an
average tenure of over 13 years and an average of
almost 20 years of related professional experience. |
| Trustworthiness of
Employees |
Vendor vetting of employees and
contractors helps ensure the integrity
of the third party’s workforce. |
Workers with access to critical systems or confidential
information are thoroughly vetted including
background checks and an acknowledgement that
they will comply with ethical codes and standards. |
| Public vs. Private
Ownership Structure
and Duration of
Consistent Ownership |
Vendor characteristics that make a
difference include private ownership
by a consistent owner for over 10 years. |
A privately held company with over two decades
of consistent ownership. Not subject to the shortterm
financial expectations that a publicly-owned, or
private equity-owned entity might face. Also removes
uncertainty surrounding potential ownership
changes and succession issues seen with private
equity-owned and family-owned companies. |
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PRODUCTS AND SERVICES
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| In-house Services
Provided |
Depth of services and capabilities
create a premium vendor experience. |
Five key service options stand out: benefit design,
BOLI product expertise and carrier support,
regulatory compliance, ongoing benefit and BOLI
administration, and professional actuarial expertise. |
| Outsourced Services |
Outsourced vendor services can affect
the quality of a client’s experience. |
None. |
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RISK MANAGEMENT STRENGTHS
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| Financial Stability |
Substantial financial strength increases
security and peace of mind. |
The considerable financial strength of parent,
M Financial Group, combined with significant
life insurance assets under management and
revenue and sales growth, instill confidence that
there is a long-term commitment to clients and
the marketplace. |
| Risk Management |
Effective Risk Management Program,
including policies, procedures, and
internal controls. |
Formal internal audit systems ensure accuracy,
quality control, and enforcement of service agreements.
Undergoes annual external SSAE 18 audits. |
| Management of
Information Systems |
Internally developed and managed
information systems offer the highest
security and privacy protections. |
Proprietary administrative services software, internal
information systems and an IT team that uses the
latest technology and security programs ensure data
integrity across data, systems and security. |
| Reliance on
Subcontractors |
It is important to know how extensively
subcontractors are used. |
Contractors are not used for key services and, in
general, are used minimally. Clients benefit from
the added security and the reduced regulatory
risk assessment steps required when functions
are not outsourced. |
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PROCESS AND ADMINISTRATION
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| Accounting/Reporting |
Specific requirements and the possibility
of penalties if they are not met
make attention to details particularly
important. |
A client customized administrative website and
actuarial certification of benefit accounting entries
strengthen fulfillment of required procedures. |
| Administrative
Systems |
A quick recovery and return to normalcy
are essential when disaster strikes |
Our systems and strategies include: business
continuation
and emergency action plans and other
precautions such as hardware redundancy, remote
data centers, data backups, on staff proprietary
software engineers and ready client access to
plan information. |
| Strategies and Goals |
A connection between executive
benefit plans and a bank’s strategies
and goals strengthen relationships with
key stakeholders. |
The aim is to design and administer successful
executive and director benefit programs that align
the strategic financial goals of the bank with the
personal wealth goals of its executives. |
| Legal and Regulatory
Compliance |
A keen eye on laws and regulations is
essential for organizations developing
benefits and BOLI programs. |
Considerable resources are devoted to following
regulatory guidelines by establishing proper
licensing and compliance processes and controls,
the underpinnings of benefit programs that retain
key talent. |
| Fee Structure and
Incentives |
Transparency is essential when
organizations determine the right fee
structure. |
Fees are open, transparent and competitively priced,
reflecting the complexity of plan design and the
number of participants. |
| Independent
Reporting and
Management
Programs |
A nimble vendor with the right protocols
can quickly address problems when
they surface. |
Proper procedures are in place to help identify,
report, investigate and remedy incidents that surface
so that senior management can find resolutions. |
