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Fixed Interest Rate Calculation

When performing valuation, OIPA must be able to accurately calculate and then credit interest to a fixed fund. There are many factors that come into play, including various calculation methods, fixed, variable or additive rates and multiple definitions of what constitutes a year.   

 

Scenario

Multiple scenarios were constructed to demonstrate this functionality. Each of the ten funds created for the Prototype Company were created to demonstrate a particular aspect of the functionality. The types of situations that the funds were configured to represent are listed below. Refer to the fund descriptions below to see which fund demonstrates which aspect of fixed interest rate calculation.   

 

Configuration Requirements

The following configuration requirements are necessary to implement fixed interest rate calculation.

 

Prototype Samples

There are three transactions configured to demonstrate fixed interest rate calculation. Navigate through the following folders in the Main Explorer to locate the configuration sample: Companies | Prototype Company | Subsidiary Companies | Prototype Child Company | Plans | Functional Prototype Plan | Transactions | Policy Transactions.    

 

Fixed Rate Transactions

Fixed Interest Rate Calculation Transactions in Main Explorer

 

There are two fields added to the PolicyScreen. This can be seen in the PolicyScreen plan level override. Navigate in the Main Explorer to Companies | Prototype Company | Subsidiary Companies | Prototype Child Company | Plans | Functional Prototype Plan | Plan Rules | PolicyScreen (Functional Prototype Plan).   

 

Policy Screen with New Interest Fields

PolicyScreen Business Rule with New Interest Fields

 

There is one new AsCode table. The values in this table can be edited through the Code Names folder in Admin Explorer. Navigate to Admin Explorer and open Administration | Code Names | AsCodeAdditiveRate.    

 

AsCodeAdditiveRate table in Admin Explorer

AsCodeAdditiveRate Editor in Admin Explorer

 

There are ten funds and each demonstrates specific calculations. The details of each fund's configuration are explained below. They are located in the Funds folder. Navigate to the Main Explorer and open Companies | Prototype Company | Subsidiary Companies | Prototype Child Company | Plans | Functional Prototype Plan | Funds.    

 

 

 

 

 

 

 

 

 

 

 

Interest Rate Funds

Interest Rate Funds in Main Explorer

 

Rates were added for each fund and can be found in the Admin Explorer in the Rate Groups folder. The Rate Descriptions are as follows: 

 

Rates in Admin Explorer for Interest Rate Funds

Rates for Funds in Prototype Company

 

There is one new business rule created to expose the components that describe the attributes of the interest calculation of fixed funds. This new rule will support deposit and fund valuations. This system rule exists globally, void of any configuration, with Fund Overrides for each of the ten funds. Navigate in the Global Rules Explorer to Business Rules | System | InterestRateCalculation | Fund Overrides.  

 

Interest Rate Overrides

InterestRateCalcuation Fund Level Overrides in Global Explorer

 

 

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