When the National Association of Insurance Commissioners approved the Model Audit Rule in 2006—the industry's version of the Sarbanes-Oxley Act for non-public companies—it mandated internal control reviews. For the National Life Group, that meant improvement was needed in its manual processes for accounting review, according to Paul Brissette, director of corporate accounting for National Life.

“Prior to 2007, all of our account reconciliations were done on paper with approval signatures required on the paper copies,” says Brissette.

Handling all that paper was a fulltime job for a member of the accounting team, gathering hundreds of accounts, tracking down the required signatures, making copies, and organizing everything into three-ring binders.

“Manual reconciliations were creating logistical problems, causing errors, and costing us valuable staff time,” says Brissette. “We needed a solution to automate our account reconciliation process.”

One solution that National Life considered was available only as an enterprise solution, which would have created another layer of resources from the IT department.

After viewing a demo, the National Life team, which included the senior vice president of finance and the corporate controller, was sold on BlackLine Systems.

“The BlackLine consultant was extremely knowledgeable about the product and had a solid understanding of the importance of accurate and timely reconciliations,” says Brissette.

A point that influenced National Life's decision was BlackLine's task management module, according to Brissette. Up to then, the carrier kept track of quarterly financial statement tasks in Excel files.

“Putting this list of tasks in BlackLine enabled us to make the list accessible to all users, while maintaining a central location from which to monitor deadlines, status, etc.,” he says.

Within a month of going online with the BlackLine system, Brissette reports 81 percent of National Life's accounts were reconciled. By June 2007, just three months after implementation, 96 percent of accounts were reconciled. By the end of 2007, the carrier had reached its goal of 100 percent reconciled items.

Four years later, National Life looks at the account reconciliation process as being both painless and reliable.

“After the first year, most users were viewing BlackLine as their normal tool for monthly tasks, as well,” says Brissette. “Internal and external auditors are pleasantly satisfied with this tool, as it gives them access to accounts with supporting documents at their fingertips, without having to wait for someone to physically deliver the reconciliation to them in paper form.”

BlackLine is a Web-based solution, so technology demands were not an issue, according to Brissette. National Life is using the SaaS/OnDemand version, so Internet access is the only thing business users need.

“Currently we upload our account balances daily,” says Brissette. “We set up a process that creates a separate upload file each time we are posting GL transactions. Twice a day, the file is imported automatically into BlackLine.”

What made the implementation special for the insurer was BlackLine's ability to respond to any deficiency in the reconciliation process.

“We've completely automated previously manual, processes,” says Brissette. “BlackLine has virtually eliminated error-prone, spreadsheet-driven accounting processes.”

Workflow and email reminders through the task management module and the ability to view documents attached by the preparer have streamlined the carrier's accounts review process.

Previously, a staff member was in charge of manually keeping binders current. Today, that employee spends time helping review documentation supporting the account reconciliations.

“We have essentially saved at least the cost of one full-time accounting-team employee, by being able to assign that person to other more strategic roles,” says Brissette. “Not to mention the savings we've seen from eliminating costs associated with the heaps of paper and binders. Now, all reconciliations and supporting documents are stored in a single online repository.”

Special Reports /

Insurer Back in Control of Manual Processes

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