2.2.9 Processing Product Annual Annuity Limit Mapping Details

This topic provides information on processing product Annual Annuity limit mapping details.

Saving Policy Creation

During capture of amount based annuity, the system will validate the minimum and maximum annuity percentage with the derived annuity percentage. At the time of policy creation, % of annuity will be derived based on the Net Initial Investment Amount.

Net Initial Investment Amount = (Contribution amount – Contribution amount *buffer %).

If there is a breach in the limits, the system will display a warning message while saving the policy creation.

During capture of percentage based annuity, the system will validate minimum and maximum annuity percentage with the annuity percentage. If there is a breach in the limits, the system will display a warning message while saving the policy creation.

Saving Policy Amendment

During amendment of a policy for amount based annuity, the system will validate the minimum and maximum annuity percentage with the derived annuity percentage. At the time of policy amendment, % of annuity will be derived based on the anniversary value + top-up inclusive transaction at that time. If there is a breach in the limits, the system will display an error message while saving the policy amendment. The validation will be done only for both percentage and amount based annuity and escalated annuity amounts will not be validated. This validation will be done for not started and active annuities.

During amendment of a policy for percentage based annuity, the minimum and maximum annuity percentage will be validated with the annuity percentage.

The system will validate the annuity amount against the market value of the policy during annuity minimum/maximum rule validation. If the newly derived annuity % does not fall between the eligible minimum and maximum annuity percentage, the system will automatically update the annuity amount to an allowable value.

During anniversary value update, system will validate the annuity amount against the market value of the policy on the anniversary date. If the newly derived annuity % does not fall between the eligible minimum & maximum annuity percentage system will automatically update the annuity amount to an allowable value.

Any updates done by the system will trigger policy amendment.

During policy save or amendment, if the anniversary period is less than 365 days, the system will annualize the SI value (any annuity paid will also be considered) for minimum/maximum annuity validation purposes.

During policy save or amendment, if the anniversary period is less than 365 days, but the policy has an annuity paid (i.e., either via Annuity or via Policy Journal), the system will consider the sum of Annuity Paid and Annuity Projected for the remaining periods in the anniversary period for 5/20 validation.

If the annuity paid out is exceeding the annuity to be paid as per the limits applicable, then the system will cancel SI value for the remaining periods in the anniversary period. A new SI that starts from first SI start date from the next anniversary date will be added if the SI is to be given in the next anniversary period also; otherwise SI value will be amended to either apply the lower limit or the upper limit.

In case a SI is cancelled due to limit violation and there is a top-up that happens subsequently, then you should add another SI for the current anniversary period, if required.

Annuity income percentage check validations will not be done for take on annuities during the first anniversary period. Validations will not be done for accelerated annuities also.

In case SI has escalated, then the system will not consider escalated value for the validations for the projected value for the remaining periods. The SI value will be used for the projection. Also, if the SI value has to be amended, then the system will not consider escalations.