Program Charter

Lighthouse Financial Services Company — This charter formally establishes the Beacon Index Advantage program: its business case, scope, governance structure, funding ceiling and roster. It is chartered at the 11 June 2026 Gate 1 second convening — the point at which the program moved from a screened concept into a funded, resourced, governed program — the same point-in-time anchor as the Stage-Gate Governance Model and the Gate Decision Framework. Detailed figures live in their owning documents and are cross-referenced rather than restated.

1. Charter Authorization & Document Purpose

This charter authorizes C. Tyrrell to act as NPD Program Manager and Chair of the Gate Review Board for the Beacon Index Advantage program, and establishes the program's business case, scope, governance structure and funding ceiling as of 11 June 2026. It does not itself release money — funding is released tranche by tranche at each gate under §13 — and it is not amended each time a gate convenes; gate outcomes are recorded in the Gate Decision Framework §13 scored record and the Gate Conditions Register, not here. This document answers one question: what was this program authorized to be, and on what terms.

2. Business Case & Strategic Context

Lighthouse Financial Services Company is a mid-size US life & annuity carrier that manufactures its own product. The carrier's existing indexed annuity shelf has not been refreshed in several product cycles, and distribution partners have asked for a competitively priced fixed indexed annuity with a modern guaranteed income rider. The board-approved business case — scored at the Gate 1 second convening after a recycle corrected an overstated capital charge — shows a five-year premium opportunity of $1,875,000,000 against a projected internal rate of return of 13.4%, above the 11.0% hurdle but with a downside case that does not clear it. Full economics, the corrected capital charge, and the written distribution commitments behind the forecast are the Gate 1 Business Case Package's record, not this charter's; this charter treats the business case as a settled input and focuses on what it authorizes as a result.

3. Program Vision & Product Description

The program builds, files and launches Beacon Index Advantage: a single-premium deferred fixed indexed annuity with a seven-year declining surrender charge and an optional Guaranteed Lifetime Withdrawal Benefit rider (Decision D-05). At launch the product offers three crediting strategies — a fixed account, a one-year point-to-point strategy on the Calder Balanced 5 Index with a cap, and a one-year performance-triggered strategy — reduced from an initially proposed five under Gate Condition GC-01. The product is deliberately not a Registered Index-Linked Annuity (Decision D-01): a RILA is a registered security and would bring SEC registration and FINRA distribution oversight into scope. Structuring the product as a non-registered fixed indexed annuity keeps the entire regulatory story inside the state insurance department filing lane described at §15. The predecessor concept this same Board considered was a RILA; see the Prior Concept Cancellation Record for why it did not proceed on those terms.

4. Program Objectives & Success Criteria

1. Launch a compliant, competitively priced product on 06 March 2028, with an illustrated cap rate holding at or above the 8.50% competitive floor fixed at Gate 1.
2. Clear the 11.0% hurdle rate on current capital treatment through the life of the five-year forecast, re-tested at every gate as assumptions are refreshed.
3. File through the primary Compact route with non-Compact states in parallel, reaching the target launch footprint without a New York workstream (Decision D-02).
4. Execute hedging in-house against the guarantee exposure, with readiness demonstrated — not merely planned — before Gate 4.
5. Close every Gate 1 condition on the evidence standard recorded at issue, verified by the Chair against that standard rather than one renegotiated at closure.
6. Hold Gate 5 and report actual results against what Gate 1 forecast, whichever direction the variance runs.

5. Program Scope

In scope

• Product design, pricing and contract form development for the FIA base contract and the optional GLWB rider.
• Regulatory filing through the Compact and non-Compact states in the launch footprint.
• Extension of the incumbent annuity administration platform (Decision D-07) and the incumbent illustration and quoting engine (Decision D-04) to support the product.
• In-house hedging program setup for the GLWB guarantee (Decision D-08).
• Distribution enablement, wholesaler training and launch marketing through existing IMO/broker- dealer relationships (Assumption A-05).
• Operations readiness for new business issue and ongoing policyholder servicing.

Explicitly out of scope

• New York at launch (Assumption A-03, Decision D-02) — a deferral memorandum, not a permanent exclusion, closed under GC-02.
• SEC registration and FINRA distribution oversight — excluded by the FIA structure itself (Decision D-01).
• A new administration platform or a new distribution channel — both decisions locked against build in favor of extending existing capability (D-04, D-07, A-05).
• Two of the five originally proposed crediting strategies, killed at Gate 1 rather than carried as technical debt (GC-01, Decision D-03).
• A full-program earned value baseline — see §20.

6. Stage-Gate Structure & Gate Calendar

Full gate mechanics, the two-tier must-meet/should-meet test and the scored record live in the Gate Decision Framework. The methodology's lineage and a plain-English explanation of the whole structure live in the Stage-Gate Methodology Guide.

7. Key Deliverables & Milestones

8. Governance Structure & Decision Rights

A six-seat Gate Review Board holds five votes and decides every gate outcome. The Chair facilitates, certifies evidence quality, and does not vote — the person accountable for the program's progress is not the person who decides whether it continues (Decision D-11).

Full mandate, quorum rules, conflict-of-interest handling and the five defined gate outcomes are set out in the Stage-Gate Governance Model & Gate Review Board Charter — the governing instrument this charter operates under, not a duplicate of it.

9. Chair Authority & Limitations

The Chair sets the gate agenda, certifies that evidence tabled meets the standard recorded at issue, verifies and closes Gate Conditions against their recorded verification method, and maintains the Gate 2 Readiness Assessment and the Gate Conditions Register between gates. The Chair does not: vote on a gate outcome, close a condition the Chair owns personally, renegotiate a verification method after issue, or authorize spend beyond the tranche a gate has released. Any of the above requires a Board decision, minuted.

10. Organizational Structure & Roster

Life-of-program headcount is 90 people across fifteen functional teams, ramping by stage, totaling 146,440 hours. The six-seat Gate Review Board is oversight only and carries no WBS assignments, leaving a working pool of 84.

Full cost detail by team, and the roster reconciliation showing every named person's hours and allocation tying exactly to these envelopes, lives in the Program Budget (§12) and the (forthcoming) Resource Plan.

11. Stakeholder Identification

12. Budget Authorization

This charter authorizes a program cost ceiling of $27,904,000 — base of $25,600,000 plus a 9.0% gate contingency of $2,304,000 — as the not-to-exceed envelope for the program's full life, from Gate 0 through launch. This is a ceiling, not a release: no stage spends against it until its own gate authorizes the tranche (§13). Full labor and non-labor line-item detail lives in the Program Budget.

13. Funding Release Mechanism

Money is released in four tranches, one per stage, each tied to the gate that authorizes it. This is the mechanism that makes §12's ceiling a ceiling rather than a baseline — no stage's spend is authorized before its gate has voted to release it.

14. Contingency Reserve & Financial Controls

The 9.0% gate contingency of $2,304,000 is held by the Gate Review Board, not by the Program Manager (Decision D-09); a draw against it requires a gate decision, not a Program Manager approval. Two draws are recorded to date, totaling $412,000: the Gate 1 recycle loop and the GC-03 external actuarial peer review. Full draw detail, the remaining reserve, and the budget derivation live in the Program Budget.

15. Regulatory & Compliance Framework

Filing runs primarily through the IIPRC (the Interstate Insurance Product Regulation Commission, “the Compact”), with California and Florida filed separately through SERFF and New York excluded from launch scope entirely. Advisor conduct is governed by the NAIC Suitability in Annuity Transactions Model Regulation (#275). The full regulatory grounding, including why an FIA rather than a RILA keeps this program out of SEC/FINRA scope, is set out in the Methodology Guide §4.

16. High-Level Risk Assessment

Twelve risks in total are tracked, alongside eight assumptions, six issues, seven dependencies and eleven decisions, in the program's RAIDD log — identified and numbered up front, not opened reactively as they surfaced.

17. Assumptions

• A-01 — the carrier is licensed and in good standing across all 46 target states through launch.
• A-02 — the Compact accepts the product under existing uniform standards; no new standard needed.
• A-03 — New York is out of launch scope.
• A-04 — the existing admin platform is extended, not replaced.
• A-05 — distribution runs through existing IMO/broker-dealer relationships; no new channel.
• A-06 — hedging is executed by the in-house Investments desk.
• A-07 — rates stay inside the Gate 1 pricing corridor.
• A-08 — no competing internal launch draws the same actuarial and IT people in 2027.

18. Constraints

• Launch date is fixed at 06 March 2028 regardless of upstream schedule slippage; the Gate 1 recycle compressed Stage 2 from a planned 46 weeks to 40 rather than moving launch.
• The incumbent annuity administration platform and illustration engine must be extended, not replaced (D-04, D-07).
• Hedging must be executed in-house by the Investments desk, or a costed alternative presented (D-08).
• The gate contingency reserve is controlled by the Board, not spendable by the Program Manager without a gate decision (D-09).
• No stage's funding may be spent before its own gate releases it, regardless of confidence in the outcome of the gate ahead.

19. Dependencies

• DEP-01 — the IIPRC review clock, an external regulator, cannot be compressed.
• DEP-02 — California and Florida department review, separate SERFF filings.
• DEP-03 — Cordelane's quarterly configuration windows.
• DEP-04 — the Calder index licensing agreement.
• DEP-05 — the Halverson Re term sheet for GLWB risk transfer.
• DEP-06 — ISDA/CSA execution with two derivatives counterparties.
• DEP-07 — Corporate Actuarial's annual assumption refresh, which feeds Gate 2 re-pricing.

20. What This Charter Does Not Authorize

A conventional program charter authorizes the full program in one act. This one deliberately does not, and that restraint is the point of chartering a stage-gate program at all.

What it does authorize is narrower and, the program's sponsors would argue, more honest: a governed process by which each of those things can be earned, gate by gate, on evidence.

21. Document Control & Related Documents

Related documents: Stage-Gate Governance Model & Gate Review Board Charter · Gate Decision Framework · Gate 1 Business Case Package · Gate Conditions Register · Gate 2 Readiness Assessment · Stage-Gate Methodology Guide.

22. Approval

This charter authorizes the NPD Program Manager to proceed with the program as described above, within the authority defined at §9, and subject to the tranche-by-tranche funding release mechanism at §13.