Create Fluctuating Rates Using a Transaction
Some rates fluctuate based on external factors that change regularly and are built into the policy contracts provided to customers. In OIPA, an initial set of rates can be loaded into the system and used as a basis for a new set of rates that are dependent on the original rates and the external factors. The generated rates apply for a certain time frame and are either used by existing and new policies as they age through that time period or are only used by new policies added during the time period. As external factors cause more rates to be generated that apply to policies, OIPA can create a set of production rates (or non-production rates if in a development or test environment). New rates are created for several purposes:
- to mark the effective date for the rates
- to set the criteria
- to add new generated rates
- to maintain and possibly terminate older rate groups.
A transaction is the vehicle used to initiate and control the creation of these new rates. The math section of the transaction uses the RATEARRAY and RATE math variables to obtain the old rates, which are modified by formula, and loaded into a Collection. An attached CreateRates business rule takes the Collection of rates and creates a rate group data table and then populates the table with the rate records. The entire process occurs when the transaction is processed as an activity in OIPA.
System validations within OIPA are used to maintain date relationships. OIPA finds the latest Rate Group by finding the greatest ActiveFromDate. If the new Rate Group’s effective date is equal to the effective date from the latest Rate Group and the ActiveToDate is null, then the CreateRates rule updates the ActiveToDate of the latest Rate Group to the date value in the <ActiveFromDate> element. Existing rate groups can be closed to future activities. This will happen automatically but can be controlled by the user by providing a different effective date for the new rate group. The different effective date will not cause the automatic closure of the older rate group.
Rates With Special Requirements
In the event that rates change based on special circumstances, an activity can be configured to calculate rates and set up the data as defined in an attached CreateRates business rule. Existing rates can be retrieved using RATEARRAY or RATE math variables. OIPA's math engine calculates rates and loads them into a collection that can be used by CreateRates. The rule creates a rate group data table and populates the table with the newly calculated rates. Typical activity processing adds the rates when an activity is added and processed. Two events typically occur when the activity is processed. First, a new rate group for an existing rate table is created. Then, existing rates groups may be closed as indicated by configuration.
Refer to the Insurance Rate prototype for a complete explanation of how to configure the activity and attached CreateRates business rule.
