ARC is proposing a new structure for its Administrative Fee in 2008 of $395.00 per independent or home office location, $150.00 for Branches and STP locations and a quarterly transaction fee of 0.020 per transaction, while maintaining a 1,000 transaction floor and moving the transaction ceiling to 1,875,000. While the proposed increase is substantial from a percentage viewpoint, the actual dollar increase, in our view, remains modest and reasonable.

ARC has invested in new systems and enhancements such as IAR 2.0, the Document Retrieval Service and the recently introduced ARC Memo Manager. Currently, ARC is laying the groundwork to move its business platforms off of aging legacy systems to what will be referred to as the new Universal Settlement System. This will allow ARC to offer new settlement services and respond to customer requests for enhancement more quickly. The Universal Settlement System planning includes adding capabilities such as the processing of ticketless transactions, processing of multiple currencies, real-time receipt and access to data, and the processing of alternative forms of payment. In addition to offering improved core settlement services, ARC is also committed to providing optional products for Agents that offer an unlimited opportunity for agency revenue generation. These products include the ARC Travel Agency Service Fee and a revitalized ARC MarketPlace, as well as the upcoming release of the prepaid MasterCard Travel Card. Through these initiatives ARC is adding new service and value to sustain and enhance the agency distribution model.

“We are working to make both ARC and the Agency channel competitive with other channels, including carrier web sites” says Mike Premo, ARC’s Vice President of Sales, Marketing and Customer Care. “ARC’s recent void window changes, faster delivery of data (Expedited Reporting), programming for ‘99 Taxes’, disaster-recovery planning and investment in Payment Card Industry (PCI) compliance keeps the ARC agency distribution channel highly competitive. ARC continues to expand the agency distribution channel, through increased carrier participation in ARC and expanded access to carrier web sites via Direct Connects.”

The Fees and Charges Working Group (FCWG) will vote on ARC’s proposal on September 18, 2007 and the next forums will occur at the fall CTDAG (CTD Advisory Group) and JAB-ARA (Joint Advisory Board – Agent Reporting Agreement) meetings in October.

ARC has given serious consideration to input received from the FCWG while deliberating this proposal, and has agreed with Agents’ requests to eliminate fees charged for required training as well as the fees associated with several miscellaneous accreditation status changes. ARC proposes to allow accredited agents to participate in training classes for free as of 2008 and to eliminate all charges associated with seven accreditation processes. The training and miscellaneous fees that will be eliminated in this proposal range from the $525.00 fee for classroom training, to the $25.00 fee to voluntarily close a location. As well, CTD locations will be assessed the same fees as agents.

ARC is seeking to obtain a fee commensurate with the market value of the products and services it provides, along with a more equitable allocation of costs between Agents and Carriers for the ARC Reporting and Settlement systems. Today, Agents pay anywhere from $250.00 to $575.00 for basic membership in organizations such as ASTA, CLIA, ACTE and Vacation.Com. ASTA’s premium membership is $2,500.00. ARC asserts that the value agents receive from ARC measures well against those membership fees. Leslie Gilpatrick, General Manager of Reporting and Settlement states, “ARC proposes to align the agent fee to reflect the market value of ARC’s products and services, taking into account costs such as ongoing maintenance and new development, and a fair allocation of costs between ARC’s two primary customer groups. ARC is seeking a greater contribution from agents to support the costs of the settlement plan. A cost formula split where carriers paid the lion’s share of the expense is no longer the sole measurement for an equitable distribution of costs.”