November 14, 2002

The Michigan Office of Financial and Insurance Services (OFIS) today announced two electronic processes that eliminate time consuming and costly paper processes.

“OFIS continues to move toward electronic processes that make us more efficient regulators,” said OFIS Commissioner Frank M. Fitzgerald. “The electronic filing of mutual fund information and insurance company financial information will save a substantial amount of money and valuable staff time.”

The first electronic process is revolutionizing filing requirements for mutual fund companies. OFIS is responsible for registering approximately 16,000 mutual fund company’s each year. Among the filings made by these companies, 65% come from Automated Business Development Corp. (ABD Corp.), the largest filing service company in the United States. As a filing service company, ABD Corp. handles varying state filing requirements for companies.

ABD Corp. developed a program called BlueExpress to meet filing requirements electronically. BlueExpress transfers each filing to OFIS with an electronic payment. At the point OFIS receives the filing and payment, an electronic confirmation is generated and the filings are stored in an OFIS database. OFIS staff are then able to utilize the database information to process mutual fund information. OFIS went on line with BlueExpress in mid-October and, after completing a testing phase, is now processing the majority of mutual fund filings electronically.

Without BlueExpress, OFIS handled all registration forms on paper, date stamped all incoming information, inputted information into databases, filed all incoming information, fees were paid by check, and records were archived after 6 months. Due to various processes from mailroom delivery to receipts processing, filings that were sent overnight mail actually took 5 to 7 days and staff management of the filings went on for much longer.

OFIS will benefit from this electronic process with a 65% decrease in paper filings, by saving 16 staff hours per week, and by saving thousands of dollars in postage and processing costs for filing acknowledgements. Some OFIS data entry will still be necessary for a short time – plans are underway to migrate the incoming mutual fund electronic information to existing OFIS databases. The benefits to mutual fund companies include eliminating hard copy expenses such as mailing fees and a significant decrease in filing time.

There is no funding impact for this process. BlueExpress is provided to OFIS at no cost as the cost savings to ABD Corp. make it cost effective to furnish the system. Michigan is the tenth state in the country to use BlueExpress and the company expects to have 15 states using electronic filing before the end of the year.

For information on mutual fund filings, the OFIS Product Review Unit of the Conduct Review and Securities Division can be reached toll free at 877-999-6442. The ABD Corp. web site is www.abd.com.

The second OFIS electronic improvement involves the transfer of financial information from insurance companies. All insurance companies operating in Michigan are required to file quarterly and year-end financial information, including filing electronically with the National Association of Insurance Commissioners (NAIC).

Insurance companies that are not headquartered in Michigan (foreign insurance companies) will back up their financial filings with a hard copy to the NAIC, but will not be required to file any financial statements with OFIS. Insurance companies that are headquartered in Michigan (domestic insurance companies) will be required to electronically file financial statements with the NAIC and back up their filing with a hard copy to OFIS. OFIS is joining NAIC’s electronic filing goal and is one of 35 states to change filing requirements. Specific filing instructions will be included in the Michigan Filing Instructions Booklet that will be posted to the OFIS website by December 1 at www.michigan.gov/cis/0,1607,7-154-10555_13044_13199---,00.html.

Financial information for insurance companies doing business in Michigan can be viewed at http://www.michigan.gov/cis/0,1607,7-154-10555_12902_18956---,00.html. The NAIC’s web site is www.naic.org.

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The Michigan Office of Financial and Insurance Services (OFIS) is responsible for the regulation of Blue Cross Blue Shield, 29 HMOs, 138 banks, 280 credit unions, almost 1,500 insurance companies, 1,583 investment advisers, 2,164 securities broker-dealers, 6,000 consumer finance lenders, 89,000 insurance agents, and 120,715 securities agents. OFIS is part of the Department of Consumer and Industry Services and is primarily fee-funded, requiring minimal public tax dollars for its regulatory and consumer assistance activities. OFIS has insurance, financial institutions and securities information available online at the OFIS web site, www.michigan.gov/ofis, or at the Michigan government home page, www.michigan.gov. All information is also available through the OFIS toll free number, (877) 999-6442. If you would like to receive OFIS press releases electronically, please email ofis-info@michigan.gov.