Oracle® Insurance Rules Palette
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.
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.
Recognize leap year
simple interest
guaranteed rates
additive rates
varying definitions of a year
The following configuration requirements are necessary to implement fixed interest rate calculation.
funds must be configured with InterestRateCalculation fund level overrides for each fund.
rates used by the funds should be uploaded through the Admin Explorer, using the Rate Groups editor or SQL statements.
A table must exist to hold additive rate codes if needed: AsCodeAdditiveRate.
Components to execute valuation like transactions, ValuesScreen and InquiryScreen.
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.
IntRateCalcMoneyIn: Demonstrates the ability to invest in one or multiple funds with the calculation of interest performed independently of each other.
IntRateCalcValuation: Calculates interest to the point in time that is selected.
IntRateCalcMoneyOut: Calculates simple interest. Principle and interest are tracked separately. When money is taken out, the interest is taken first followed by the principle. This activity demonstrates how the principle and interest columns are affected.
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).
InterestBonusQual
EffectiveDate
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
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 Calc Fund 1
Static decimal rate
Current interest with one additive interest that sometimes adds to the current interest rate. The additive interest is turned on or off based on whether the InterestBonusQual PolicyScreen field is set to Yes. If set to No, the additive rate = 0.
Compound interest
Policy year (365)
Interest period end
Helped to determine when the rate changed; end of day or beginning of day.
Adjust date calculation: no
Fund level tracking
Interest Rate Calc Fund 2
Lookup a percentage rate
Immediate change upon declaration of new rate
Current interest only
Compound interest
Calendar year (365)
Interest period begins at the beginning of the day
Adjust date calculation: no
Fund level tracking
Interest Rate Calc Fund 3
Lookup a decimal rate
Changes on anniversary of deposit
Last known rate; the rate will not change until anniversary
Current interest only
Compound interest
360 day year
Interest period begin
Adjust date calculation: no
Deposit level tracking
Interest Rate Calc Fund 4
Look up a decimal rate
Changes on anniversary of deposit
Age of deposit (For example, on the day of deposit, the deposit date age = 0)
Current interest only
Compound interest
Policy year
Interest period begin
Adjust date calculation: no
Deposit level tracking
Interest Rate Calc Fund 5
Look up a decimal rate
Changes on anniversary of policy
Age of policy
Current interest
Compound interest
365 day year with leap day
Interest period begin
Adjust date calculation: no
Guaranteed interest rate
Static rate: compares current rate against guaranteed rate to determine which rate is greater
Fund level tracking
Interest Rate Calc Fund 6
Look up a percentage rate
Changes on the anniversary of the policy, biennially guaranteed for two years
Age of policy
Current interest
Compound interest
365 day year with no leap day
Interest period begin
Adjust date calculation: no
Guaranteed interest rate
Lookup rate
Fund level tracking
Interest Rate Calc Fund 7
Look up a decimal rate
Changes on anniversary of policy
Current interest
Simple interest
Policy year
Interest period begin
Adjust date calculation: no
Guaranteed interest rate
Static
Fund level tracking
Interest Rate Calc Fund 8
Lookup a decimal rate
Immediate change
Current interest only
Compound interest
Calendar year
Interest period end
Adjust date calculation: no
Fund level tracking
Interest Rate Calc Fund 9
Lookup a decimal rate
Immediate change
Current interest only
Compound interest
Calendar year
Interest period begin
Adjust date calculation, yes
Fund level tracking
Interest Rate Calc Fund 10
Lookup decimal rate
Never changes
Current interest only
Compound interest
Policy year
Interest period begin
Adjust date calculation, no
Fund level tracking
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:
Fund 1: Fund1IntBonusRate or ZeroRate
Fund 2: Fund2InterestRate
Fund 3: Fund3InterestRate
Fund 4: Fund4InterestRate
Fund 5: Fund5InterestRate
Fund 6: Fund6InterestRate and Fund6GuarIntRate
Fund 7: Fund7InterestRate
Fund 8: Fund8InterestRate
Fund 9: Fund9InterestRate
Fund 10: Fund10InterestRate
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.
InterestRateCalculation
InterestRateCalcuation Fund Level Overrides in Global Explorer
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