Lighthouse Financial Services Company — The Stage-Gate Governance Model establishes who decides and how the process runs. This document establishes what is assessed and to what standard. It defines the two-tier test applied at every gate, the evidence that counts, the score bands and their relationship to the five outcomes, the specific criteria for each of the six gates, and the scored record of the gates already held.
Table of Contents
- Purpose & Relationship to the Governance Model
- The Two-Tier Test — Must-Meet and Should-Meet
- The Scoring Scale
- The Evidence Standard
- Score Bands & Their Relationship to Outcomes
- Criteria Are Fixed at the Prior Gate
- Gate 0 — Concept Screening
- Gate 1 — Business Case
- Gate 2 — Development Complete & Filing Readiness
- Gate 3 — Validation & Filing Approval
- Gate 4 — Launch Readiness
- Gate 5 — Post-Launch Review
1. Purpose & Relationship to the Governance Model
Two documents govern gate decisions on this program and they do different work. The Governance Model defines the Board, its authority and its limits, the outcomes available, quorum and voting, and the protocols for recycling and cancelling. This framework defines the questions the Board answers and the standard of proof it requires before answering them.
The separation matters in practice. Authority questions change rarely; assessment criteria change at every gate, because what you need to know about a product at concept screening is not what you need to know about it eight weeks before it goes on sale. Holding them in one document would mean revising the constitution every time the criteria moved.
2. The Two-Tier Test — Must-Meet and Should-Meet
Every gate applies two tiers in sequence. The first is binary and the second is scored. The order is not negotiable: a package that fails the first tier is not scored at all, because a weighted average is an excellent way to bury a disqualifying fact under five satisfactory ones.
Tier 1 — Must-Meet (knockout, binary, unweighted)
Each must-meet criterion is answered yes or no. A single no removes GO and GO WITH CONDITIONS from the outcomes available at that gate, whatever the Tier 2 score would have been. The Board's remaining choices are RECYCLE, HOLD or CANCEL.
Must-meet criteria are deliberately few and deliberately absolute. They exist to capture the conditions under which continuing would be indefensible rather than merely unattractive — a product that cannot lawfully be sold, a price the capital cannot support, a guarantee that cannot be hedged.
Tier 2 — Should-Meet (weighted, scored 1–5)
Should-meet criteria capture attractiveness rather than admissibility. Each is scored 1 to 5 and weighted; the weights total 100% and are set for each gate in advance under §6. Weightings shift across the program's life: early gates weight market and strategic questions most heavily, later gates weight execution and operational readiness, because by Gate 4 the market question has already been answered and the open risk is whether the organisation can actually deliver.
3. The Scoring Scale
Terminology: this programme labels the gate outcomes GO, CANCEL, HOLD, RECYCLE and GO WITH CONDITIONS. Robert G. Cooper's Stage-Gate framework uses a blunter word where this says CANCEL — same decision, same authority. See the Governance Model §9.
| Score | Meaning | What it implies for the decision |
|---|---|---|
| 5 | Strong — materially better than the comparable alternative, evidenced | Supports GO |
| 4 | Good — meets the standard set at the prior gate, evidenced | Supports GO |
| 3 | Adequate — acceptable but with a known weakness that is being managed | Supports continuation, usually with a condition attached |
| 2 | Weak — below the standard set at the prior gate, with no credible remediation | Argues against continuation |
| 1 | Unacceptable | Argues for cancellation |
| U | Unscoreable — the evidence to score this criterion is absent or not credible | Automatic recycle recommendation. See §4 and §14 |
4. The Evidence Standard
A criterion is scoreable only where it rests on evidence of the following kinds. This list is restrictive by design.
| Counts as evidence | Does not count |
|---|---|
| A written commitment from an accountable party (a signed channel commitment, a vendor statement of work, an executed term sheet) | A verbal indication, a meeting note, or a relationship manager's confidence |
| An actuarial or compliance opinion, signed, with its assumptions stated | An opinion in preparation, or one whose assumptions are not disclosed |
| A model output whose inputs are current and whose version is identified | A model output whose inputs have been superseded — see §14 |
| Observed data from a comparable in-force product or a completed pilot | An analogue drawn from a materially different product or market |
| A regulator's written determination or published standard | An expectation of how a regulator will respond |
Where evidence is of the right kind but its currency is in doubt, the assessor records the date of the underlying input alongside the score. A score supported by a nine-month-old capital charge is not the same score as one supported by this quarter's.
5. Score Bands & Their Relationship to Outcomes
Bands indicate which outcomes the evidence supports. They do not select one.
Overriding rules
- Any must-meet failed → GO and GO WITH CONDITIONS are unavailable regardless of the weighted score.
- Any criterion scored U → the Chair tables a RECYCLE recommendation. The Board may override, but the override and its reasons are recorded.
- A Board decision that departs from the band is permitted and is minuted with the reasons. Departures are reviewed at Gate 5 — a framework whose bands are routinely overridden is not describing how the organisation actually decides, and should be changed rather than ignored.
6. Criteria Are Fixed at the Prior Gate
This is an anti-gaming provision and it cuts both ways. A program team cannot be judged at Gate 2 against criteria invented after Stage 2 was already spent; equally, the team cannot negotiate the bar downward once it becomes clear the product will struggle against it. The Gate 2 criteria at §9 were fixed at Gate 1 on 11 June 2026 and have not moved since.
7. Gate 0 — Concept Screening
Gate 0 asks one question: is this concept worth the cost of a business case? It is a cheap gate by design and its must-meet list is short, because the purpose of Stage 1 is precisely to establish the facts that later gates will test.
Must-meet
- The concept falls within the carrier's licensed lines and existing product authority.
- There is no known regulatory prohibition on the structure in the target lane.
- The concept does not require a capability the organisation has already decided not to build.
Should-meet — scored 05 February 2026
| Criterion | Weight | Score | Weighted |
|---|---|---|---|
| Strategic fit with the annuity portfolio | 25% | 4 / 5 | 1.00 |
| Market attractiveness | 25% | 4 / 5 | 1.00 |
| Feasibility — can it be built and filed | 20% | 4 / 5 | 0.80 |
| Distribution appetite | 15% | 4 / 5 | 0.60 |
| Preliminary economics | 15% | 3 / 5 | 0.45 |
| Weighted total | 100% | — | 3.85 |
Outcome GO, carried 5–0. Stage 1 released at $2,180,000. No conditions attached. The single score of 3 — preliminary economics — was expected at this gate and is the reason Stage 1 exists.
8. Gate 1 — Business Case
Gate 1 is the first gate with real money behind it: it releases $11,640,000, the largest single tranche in the program. Its must-meet list is correspondingly demanding.
Must-meet
- Product can be filed in the assumed regulatory lane, confirmed by Legal & Compliance.
- A pricing basis exists that clears the hurdle rate on a current capital charge.
- The guarantee can be hedged with in-house capability, or a costed alternative is presented.
- Distribution has confirmed appetite in writing from at least three partners.
- Required capital is available within the planning period without displacing a committed use.
Should-meet — scored 11 June 2026 (second convening)
| Criterion | Weight | Score | Weighted |
|---|---|---|---|
| Market attractiveness | 20% | 4 / 5 | 0.80 |
| Competitive position — illustrated cap against peer set | 15% | 3 / 5 | 0.45 |
| Distribution commitment | 20% | 3 / 5 | 0.60 |
| Financial return against hurdle | 20% | 3 / 5 | 0.60 |
| Technical & operational feasibility | 15% | 3 / 5 | 0.45 |
| Risk profile | 10% | 3 / 5 | 0.30 |
| Weighted total | 100% | — | 3.20 |
Outcome GO WITH CONDITIONS, carried 4–0–1. The score of 3.20 sits in the conditions band, and the four criteria scoring 3 map directly onto the conditions issued: competitive position and financial return to GC-03 (external pricing peer review), distribution commitment to GC-04, feasibility to GC-01 and GC-05. This is the intended behaviour of the framework — every weakness that supports a continuation decision should leave the room with an owner attached to it.
9. Gate 2 — Development Complete & Filing Readiness
Criteria fixed at Gate 1 on 11 June 2026. Gate convenes 01 April 2027; releases $7,450,000.
Must-meet
- Contract forms complete and cleared by outside counsel.
- Pricing signed by the Chief Actuary on current assumptions, and supported by the independent external review required under GC-03.
- Illustration output validated against the filed methodology.
- Hedging readiness plan accepted under GC-05, with ISDA milestones dated.
- All Gate 1 conditions closed, or explicitly re-issued by Board decision with new dates.
Should-meet
| Criterion | Weight |
|---|---|
| Filing readiness — completeness of the Compact submission package | 25% |
| Pricing robustness under the external review and current option budget | 25% |
| Platform & illustration build completeness against specification | 20% |
| Competitive position of the illustrated product at current rates | 20% |
| Distribution readiness — channel and appointment pipeline | 10% |
10. Gate 3 — Validation & Filing Approval
Convenes 28 October 2027; releases $4,330,000. This is the gate at which an external party — the regulator — holds a decisive input the program cannot influence, which is why the must-meet list here is almost entirely outside the team's control.
Must-meet
- Compact approval obtained, or a dated approval path confirmed in writing.
- Non-Compact state approvals obtained or scheduled within the launch window.
- Actuarial sign-off on final rates and reserve adequacy.
- Product still clears the hurdle rate at approved rates and current capital treatment.
- Hedging capability demonstrated, not merely planned.
Should-meet
| Criterion | Weight |
|---|---|
| Breadth of approved jurisdictions against the launch plan | 25% |
| Validation results — end-to-end issue, illustration and servicing | 25% |
| Retained economics at approved rates | 25% |
| Operational readiness of new business and policyholder services | 15% |
| Residual risk position against the register | 10% |
11. Gate 4 — Launch Readiness
Convenes 24 February 2028; authorises launch on 06 March 2028. Gate 4 releases no new tranche. It answers whether the organisation can sell and service what it has built, and the weighting shifts decisively toward execution.
Must-meet
- Producers appointed and licensed in sufficient number to support the launch plan.
- Suitability and best-interest training delivered and recorded for the launch channel.
- New business and servicing processes tested end to end with trained staff.
- Hedging live and operating against a shadow book.
- Complaint handling, disclosure and market conduct controls operational.
Should-meet
| Criterion | Weight |
|---|---|
| Distribution readiness — wholesaler coverage and pipeline | 30% |
| Operational readiness — capacity against forecast volumes | 30% |
| Marketing and advisor enablement completeness | 20% |
| Competitive position at launch rates | 20% |
12. Gate 5 — Post-Launch Review
Convenes 07 September 2028, reviewing the window 06 Mar 2028 to 01 Sep 2028. Gate 5 is not an authorisation gate and does not use the score bands. It cannot stop a product already in the market. It exists to hold the business case to account and to transfer benefit ownership to the operating line.
What Gate 5 assesses
- Actual against forecast — sales volume, average case size, crediting strategy mix, persistency and rider election, each against what Gate 1 was told.
- Where the business case was wrong, and in which direction. Recorded specifically, not as an aggregate variance.
- Whether the conditions issued at Gate 1 achieved what they were issued to achieve. A condition that closed on schedule and changed nothing is a finding.
- Whether Board decisions departed from the score bands, and whether those departures proved sound (§5).
- Benefit ownership transfer to the product line, with named owners and a measurement cadence that outlives the program.
13. Scored Record — Gates Held to Date
| Gate | Date | Must-meet | Weighted score | Band | Decision |
|---|---|---|---|---|---|
| Gate 0 | 05 Feb 2026 | 3 of 3 passed | 3.85 | GO | GO 5–0 |
| Gate 1 (first) | 30 Apr 2026 | Not reached — 2 criteria scored U | Not scored | — | RECYCLE |
| Gate 1 (returned) | 11 Jun 2026 | 5 of 5 passed | 3.20 | CONDITIONS | GO WITH CONDITIONS 4–0–1 |
| Gate 2 | 01 Apr 2027 | Not yet convened — criteria fixed at §9; GC-03 and GC-05 must close first | |||
14. Why the Gate 1 Recycle Was Not a Low Score
The distinction this section draws is the reason the framework has a U value at all, and it is the most frequently misread event in the program's record.
At the first convening of Gate 1 on 30 April 2026, the package was not scored. Two criteria could not be assessed on the evidence presented:
- Distribution commitment — U. The volume assumptions had been built from internal channel modelling. No written commitment from any partner was in the pack, and the evidence standard at §4 does not admit a relationship manager's confidence as a substitute.
- Financial return against hurdle — U. The return calculation used a capital charge that had been superseded. The output was of the right kind but its input was not current, which §4 places outside the standard.
Neither finding said the product was weak. Both said the Board could not responsibly form a view either way — and a Board that votes anyway in that position is not governing, it is guessing with a quorum. The package returned on 11 June 2026 with written commitments from three partners and a recomputed return on the current charge, and scored 3.20.
Recorded as issue I-01. The remediation is traceable through conditions GC-04 (re-validated volumes) and the corrected capital charge carried into the revised case.
15. Document Control
| Version | Date | Change |
|---|---|---|
| 1.0 | 05 Feb 2026 | Issued at Gate 0. Two-tier test, scale and bands established; Gate 0 and Gate 1 criteria fixed. |
| 1.1 | 30 Apr 2026 | Evidence standard (§4) tightened following the Gate 1 recycle; the U value formalised on the scale after being applied ad hoc at that gate. |
| 2.0 | 11 Jun 2026 | Reissued at Gate 1. Criteria and weights fixed for Gates 2, 3 and 4 (§§9–11). Gate 5 defined as a non-authorising accountability gate. Criteria-locking provision added at §6. |
Owner: C. Tyrrell, NPD Program Manager and Chair of the Gate Review Board. Approving authority: the Gate Review Board. Related: Stage-Gate Governance Model & Gate Review Board Charter, Gate Conditions Register, Gate 1 Business Case Package, Gate 1 Recycle Memorandum.