Unit Linked Funds Overview

The Oracle Policy Administration system can be configured to administer plans that use unit linked funds and address global unit dealing practices. The system can manage funds from various world markets and various currencies. Accurate calculations for gain and loss are captured when backdating, recycling, inadvertent delays and reversals are processed.

The system helps balance fund units held with fund units that are linked to policyholder accumulation values. In OIPA regular, accurate and timely unit dealing order reports can be distributed for the carrier investment managers based on a variety of possible price guarantees. The system also can calculate and account for breakage properly, reduce breakage and reduce currency conversion charges. Fund value estimates can be reported accurately at all times based on the last price applied to all completed and partial unit deals.

Unit linked funds are denoted in units and each unit has a value based on the declared price for that fund at the declared point in time. The system supports multiple price guarantees by identifying a fund as unit linked. It will then go through steps to look up the market calendar for the fund, determine pricing dates based on the fund pricing and calendar offset, perform any necessary currency conversion and then perform policy valuation. Valuation may be executed to value funds at their aggregate value or at fund deposit level detail.

Fund movement is a way to describe the movement of current fund values. The fund movement process allows the system to process multiple movements into or out of funds on a single activity. Each individual fund movement can process independently of one another. This allows funds to be bought or sold immediately after the unit value for that fund is received (but before the activity has completely finished processing). Individual funds can be associated with different fund house business calendars.

OIPA allows activities to partially process. When the NUV for a fund is received the transfer for that fund is processed. When all funds in the transaction are processed then the transaction is completed. The minimum number of business days to wait for a NUV is configurable at the transaction level, but defaults to 0 for backwards compatibility.

To understand how the system processes unit linked funds refer to the High Level Unit Link Fund Processing diagram.