SEPA - Single Euro Payments Area

SEPA - Single Euro Payments Area Questions and Answers Index of Questions (click on the Q number to go straight to the answer) Q1 What is SEPA?... 2 Q2 What is the objective of SEPA?... 2 Q3 Why is Aviva moving to SEPA... 2 Q4 What payment types are covered under SEPA?... 2 Q5 What currencies are covered under SEPA?... 2 Q6 When will GI migrate to SEPA?... 2 Q7 What are the SEPA zone countries?... 2 Q8 What is a BIC?... 3 Q9 What is an IBAN?... 3 Q10 What does an IBAN look like?... 3 Q11 Where can I get my IBAN and BIC?... 3 Q12 How long will it take for a SEPA credit transfer to reach the beneficiary?... 3 Q13 How long will it take to collect on a SEPA Direct Debit?... 3 Q14 What will happen to existing Direct Debit mandates after 1st February 2014?... 4 Q15 What is changing for the Customer?... 4 Q16 What is changing for Aviva?... 4 Q17 What is changing for Brokers?... 5 Q18 How are Direct Debit unpaids dealt with?... 5 Q19 What are the new transaction codes for SEPA DD and when are they used?... 6 Q20 How will the migration to SEPA impact Customers... 6 SEPA Default Reason Codes... 7 1

SEPA - Single Euro Payments Area Questions and Answers Document Q1 What is SEPA? The Single Euro Payments Area (SEPA) is a European-wide initiative to standardise the way we make and process electronic payments in Euro. SEPA will replace the way we currently process our Direct Debits and Direct Credits. Q2 What is the objective of SEPA? The main objective of SEPA is to make it easier for customers to effect electronic Euro currency payments across the SEPA zone. SEPA means a customer can make electronic payments to any beneficiary located anywhere in the euro zone at the same cost & within the same timeframe as a national electronic payment Q3 Why is Aviva moving to SEPA SEPA is mandatory. With the passing of EU Regulations (Regulation (EC) No. 260/2012 - the SEPA Regulation), the move to SEPA standards will become mandatory on 1st February 2014. Q4 What payment types are covered under SEPA? SEPA Credit Transfer Scheme (Refunds from Aviva to Customer accounts) SEPA Direct Debit Scheme (Payments from Customer accounts to Aviva) Q5 What currencies are covered under SEPA? SEPA covers Euro denominated transactions only. Q6 When will General Insurance migrate to SEPA? GI will become SEPA compliant on Monday 13th January 2014 Q7 What are the SEPA zone countries? Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, The Netherlands, Portugal, Slovakia, Slovenia and Spain, Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Latvia, Lithuania, Poland, Romania, Sweden, United Kingdom, Iceland, Liechtenstein, Norway, Switzerland, Monaco Note: Relevant only to Euro denominated transactions processed in these countries 2

Q8 What is a BIC? A Bank Identifier Code (BIC), also known as the SWIFT Address, is a unique identification code for a specific financial institution. BIC codes consist of either 8 or 11 alphanumeric characteristics. Q9 What is an IBAN? The International Bank Account Number (IBAN) is a standardised European bank account number. Q10 What does an IBAN look like? The IBAN is not a new account number and does not replace an account holder s existing bank account details. Additional characters are added to form the verifiable and unique IBAN for each account that is already in place. The following is an example of an IBAN for an Irish Bank Account: IE33AIBK93123487654321 IE Country Code for the Republic of Ireland 33 Two digit check number AIBK First four digits of Bank Identifier Code (BIC) 931234 National Sort Code 87654321 Account Number Q11 Where can I get my IBAN and BIC? Details of your BIC and IBAN are printed on your account statement. Your BIC and IBAN can also be found on most online banking services. IPSO have a NSC/Account number conversion tool which is free and simple to use - https://ipsosepaservice.sentenial.com/ipso/ this can be used when a customer has their NSC/Account Number but is not sure of their BIC/IBAN information. Q12 How long will it take for a SEPA credit transfer to reach the beneficiary? The payment file must be submitted to AIB by 3.00pm one business day before the requested execution date, e.g. if the beneficiary is supposed to receive funds on the 28th March, the file must be submitted to AIB by 3.00pm on 27th March. Q13 How long will it take to collect on a SEPA Direct Debit? The first collection on a SEPA Direct Debit mandate must be submitted to AIB six business days prior to the instalment due date. All recurring instalments must be submitted to AIB three business days prior to the instalment due date - renewal rollover is deemed a recurring instalment under SEPA. 3

Q14 What will happen to existing Direct Debit mandates after 1st February 2014? Existing mandates will continue to be valid after 1st February 2014. The new SEPA customer rights will apply to customers who signed up under existing mandates. Aviva will convert existing bank account details from sort code & a/c number to BIC & IBAN prior to migration - this will be done automatically using the IPSO conversion tool. There is no action required on the part of the customer. Q15 What is changing for the Customer? Customers will need to become familiar with BIC & IBAN which are replacing Sort Code & Account Numbers. Customers can now use non ROI accounts to pay direct debits. Customers can request a "No Quibble" refund from their bank for any DD within 8 weeks from the date the DD was collected. Within this 8 week period their bank will give them an immediate refund on a no-questions asked basis. Customers can request a refund for any unauthorised DD after 8 weeks and within 13 months from the date the DD was collected, this refund is not an immediate refund and will be dealt with in the same way as the current DD indemnity claims. Customers have more power in relation to controlling their direct debits, e.g. they can now if they wish block a Creditor taking DDs on their account, limit the amount & timing of DDs taken. Aviva will convert existing customer's bank details to BIC & IBAN automatically before migration to SEPA - there is no impact for the customer, customers are not required to sign a new mandate. Under SEPA, Aviva is now required to send Direct Debit collection files to the bank earlier which means the first instalment on a new mandate or amended mandate can only be collected from the customer s account 19 days after mandate setup and 17 days after a PPP rollover. Q16 What is changing for Aviva? A new legal agreement called a SEPA Creditor Agreement has been put in place with AIB. Aviva have been provided with new creditor identifiers (OINS) for all direct debit collections & credit transfers. Aviva is required to convert all existing sort codes & account numbers to BIC & IBAN prior to go live. From the date of implementation Aviva can only accept BIC & IBAN from customers. DD collections must be advised to the bank earlier i.e. 6 business days in advance of the due date in the case of first collections (new mandates including changes to bank details mid-term) and 3 business days in advance of the due date in the case of recurring collections (renewal rollover is deemed a recurring collection). 4

All impacted systems & documentation will be updated for SEPA compliance. Where collections have not happened on a PPP in 36 months the mandate is invalid and a new mandate must be signed by the customer - the first collection on this new mandate must be sent to AIB 6 business days in advance of the instalment due date. Aviva is now legally obliged to accept non ROI (known as cross border) bank accounts for the collection of direct debits and the payment of credit transfers. In the case of direct debits for cross border bank accounts a signed paper mandate must be obtained before the direct debit can be setup. Customers can now request a "No Quibble" refund from their bank for any DD taken in the previous 8 weeks. This refund will be credited to the customer's account immediately and an unpaid advice provided to Aviva on the daily default file from AIB. Aviva will monitor the occurrence of these "8 week refunds" and will issue an immediate 10 day cancellation notification by registered post taking the customer off cover as soon as possible. The way collections, credit transfers and unpaids are credited/debited on Aviva's bank accounts will change. Q17 What is changing for Brokers? There is minimal impact on Brokers and the way that business is sent to Aviva. Aviva will replace any manual DD mandates which brokers/partners hold prior to go live date. Brokers, as with customers, will need to be familiar that BIC and IBAN will be replacing NSC and Account Number and from when Aviva go live with our changes we will only accept BIC/IBAN. For in-flight mandates sent to customers for defaulted payments etc., Aviva will accept the old paper mandate issued with the default letter and manually convert to BIC/IBAN for the cut-over period. For RELAY HOME business the front end screens will still request NSC/account number at initial go-live until RELAY make the changes prior to the 1/2/14 deadline. The mandate produced from this process is the new Aviva SEPA mandate which will need to be populated with BIC and IBAN and returned to Aviva in the normal way. All other processes will remain unchanged. Q18 How are Direct Debit unpaids dealt with? There are 25 default reason codes under SEPA replacing the existing 8 default reason codes click here to view "SEPA Default Codes" the full list of new reason codes. The default letters issued to customers post SEPA will continue to show the current (pre SEPA) explanation for the default, the new SEPA reason code will be maintained on the notes in the PPP system. Under SEPA unpaids are broken into the following categories: Rejects - these are unpaids received in the time between the collection file being sent to 5

AIB and the date the instalment is due to be taken from the customer's account. Typical types of rejects are "Account Closed", "Invalid IBAN". Returns - these are unpaids received from AIB after the instalment due date. Typical reason for returns is "Insufficient Funds". Refunds - these are unpaids received where a customer has requested from their bank either an "8 week refund" or a refund for an "unauthorised DD" after 8 weeks and within 13 months from the date the DD was collected. Settlement date - this is the date the instalments are collected from the customer's accounts by AIB. This is also the date Aviva receives payment for these instalments on our bank account. Rejects (pre settlement unpaids) are netted off the settlement amount received by Aviva i.e. Aviva sends a collection file to AIB on 1st May for 1,000 for collections due on 7th May - AIB then send Aviva back rejects for 200 on 4th May i.e. before the settlement date. The amount displayed on Aviva's account on 7th May is 800 (currently we would receive 2 entries on the bank statement 1,000 credit for the full collection file & 200 debit for the unpaids received). Returns & refunds (post settlement unpaids) appear on Aviva's bank statement as one unpaid amount per day even though Aviva may have received multiple unpaid files for that day. Q19 What are the new transaction codes for SEPA DD and when are they used? FRST - Must be used for the first collection on a mandate and must be submitted at least six business days prior to the required collection date. This includes changes to bank details midterm. RCUR - Must be used for all remaining SEPA DD transactions and must be submitted at least three business days prior to the required collection date. Note: If the collection is rejected or returned pre-settlement, it will be necessary to re-submit the collection as an FRST. If the collection is rejected or returned post-settlement, the collection can be re-submitted as a RCUR. Q20 How will the migration to SEPA impact Customers Aviva will convert existing customer's bank details to BIC & IBAN automatically before migration to SEPA, customers are not required to sign a new mandate. The last DD collection before migration will be on Wednesday 8th January 2014 and will include collections up to and including Thursday 9th January 2014. All Aviva instalments sent for collection for the first time under SEPA must be coded as a "FRST" and sent to AIB 6 business days before the collection is taken from the customer's account. This means instalments due on 10th, 11th, 12th, and 13th of January will not be debited from customer's accounts until 21 st January 2014, instalments due on 14th January will not be debited from customer's accounts until 22nd January 2014. This delay in collections is for the first month only. There is no impact for credit transfers. 6

SEPA Default Reason Codes R-TXN REASON AIB explanatory note - Reconciliation Guide AC01 Account identifier incorrect (i.e. Debtor Account is Invalid invalid IBAN) AC04 Account closed Debtor Account is closed AC06 Account Blocked Debtor Account does not allow Direct Debits Debtor Account has been blocked AG01 Direct debit forbidden on this Transaction forbidden on Debtor Account account for regulatory reasons AG02 Operation/transaction code AIB will not use this code incorrect, invalid file format AM04 Insufficient Funds Insufficient funds (Note: Previously would have been used as Refer to Drawer/Payer) AM05 Duplicate collection Duplicate Collection i.e. FRST presented on a FRST for same details BE01 Debtor s name does not match with the account holder's name. Debtor s name does not match with the account holder's name (Note: AIB does not validate the debtor name field) BE05 Identifier of the Creditor incorrect AIB will not use this code for file validation FF01 Operation/transaction code incorrect, invalid file format (File level validation for Direct File Submission only) FF05 Direct Debit type incorrect AIB will not use this code for file validation MD01 No Mandate No valid Mandate No instruction Instruction cancelled (Note: This reason code will also be used where a request for an unauthorised transaction post 8 weeks is processed) MD02 Mandate data missing or incorrect This may be used by banks whereby the incorrect UMR has been quoted This may also mean that some mandate data previously quoted is incorrect MD06 Disputed authorised transaction Refund: direct debit transaction disputed by the debtor MD07 Debtor deceased Debtor is deceased MS02 Refusal by the Debtor Customer has refused the payment of a direct debit (allowed under PSD regulation) Debtor initiates a rejection Blocked for regulatory reasons i.e. Creditor Blacklisted, amount or periodicity restriction MS03 Reason not specified Miscellaneous reason AIB use of this code is only in exceptional circumstances NARR RC01 Narrative. Additional Information will be also provided Bank identifier incorrect (i.e. invalid BIC) Equivalent of Other or Miscellaneous whereby if this reason is populated, the description provides additional information. Debtor BIC is Invalid Creditor BIC is Invalid RR01 Regulatory Reason Missing Debtor Account or Identification - Code used by banks to indicate a Return for Regulatory Reason RR02 Regulatory Reason Missing Debtor Name or Address - Code used by banks to indicate a Return for Regulatory Reason RR03 Regulatory Reason Missing Creditor Name or Address - Code used by banks to indicate a Return for Regulatory Reason RR04 Regulatory Reason Regulatory Reason SL01 Specific Service offered by the Specific Service offered by the Debtor Bank Debtor Bank XXXX Unknown Reason Aviva misc reason code when default code received on file matches none of the above 7