Create a New Liability Calculation Definition

Perform the following steps to create a new Liability Calculation Definition:

1. In the Liability Calculations table, click Add to open the Liability Calculation window.

   Figure 4-18 The Liability Calculation Window

   
   

   

   
   
2. Populate the Liability Calculation Definition pane.

   Table 4-3 The Liability Calculation Definition Pane

   Field	Description
   Details pane
   Name	Enter a name for the Liability Calculation Definition.
   Description	Enter a short description of the Liability Calculation Definition.
   Folder	Select a folder from the drop-down list.
   Legal Entity	Click Hierarchy Selection adjacent to this field. Select the required Legal Entity from the Hierarchy Selection window. For more information, see Hierarchy Selection.
   Line of Business	Click Hierarchy Selection adjacent to this field. Select the required Line of Business from the Hierarchy Selection window. The application supports the selection of multiple hierarchies in the Hierarchy Selection window for a single Liability Calculation. Select the desired number of LOBs in this window and then click OK. Multiple LOBs are added to this field. For more information, see Hierarchy Selection.
   Run Type	Select a Run type from the drop-down list. The available options are: Solo Consolidated
   Reinsurance Held	Click the icon to enable the Reinsurance Held Feature. When enabled, the Transition and Include Retrospective Reinsurance fields appear.
   Transition	Click the icon to enable the Transition feature. On enabling this option, the Transition Method and Transition Calculation Preference drop-down lists are displayed in the Direct Insurance pane.
   Acquired Contract	Click the icon to enable the Acquired Contract for the Liability Calculation Definition. If enabled, then an additional template for direct insurance for a selected method can be chosen; one for Reinsurance Held and one for Full Retrospective.
   Execution Type*	Select either Incremental or YTD. For more information on the YTD feature, see the YTD Feature Document on MOS.
   Projection In Years	Enter the number of years for which the data must be projected. When you add a value in this field, the ProjectionFrequency field appears. Note: This field only appears if the ReinsuranceHeld field is enabled.
   Extension Pack	Click the Extension Pack slider to use the new Output Variables that were created on the Calculation Preference Configuration page. Note: This feature is only available if the Insurance Accounting Analyzer Extension Pack License is activated.
   Projection Frequency	Select a Projection Frequency from the drop-down list. The available projection frequencies are: Annually Half Yearly Monthly Quarterly Note: This field is available only if you entered a value in the Projection in Years field.
   DirectInsurance pane
   Calculation Method	Select a method from the drop-down list. The available methods are: General Measurement Model Long Duration Contracts Premium Allocation Approach Variable Fee Approach
   Calculation Preference	Select a value from the drop-down list. Note: PAA YTD Templates work only when input variable data is given as a download. Therefore, when PAA YTD Templates are selected, then do not select ‘Compute Expected and Actual’ and ‘Compute Expected’ under the ‘Calculate Input Variable’ within a ‘Level of Aggregation’ selection.
   View More	After selecting a Calculation Method and Preference in this pane, clicking this icon opens the Direct Insurance window. In this window: Select a Calculation Method and Preference from the Calculation Method and Calculation Preference fields, respectively. Click Add. Multiple Calculation methods with the required preferences can be added. Click Close to close the Direct Insurance window.
   Acquired Contract Calculation Preference	Select a value from the drop-down list. Note: This field is displayed only if you have enabled the Acquired Contract Option.
   Transition Method	Select the type of transition method from the drop-down list. The available options are: Fair Value Approach Full Retrospective Modified Retrospective Note: This field is displayed only if you have enabled the Transition Option.
   Transition Calculation Preference	Depending on the method that you selected in the Insurance Contract Calculation Method field, the Transition Calculation Method field is populated with the required values. Select the type of Transition Calculation Preference from the drop-down list. Note: This field is displayed only if you have enabled the Transition Option.
   Include Retrospective Reinsurance	Click the icon to enable the Retrospective Reinsurance Contract pane. Note: This field is available only if you enabled the Reinsurance Held Field.
   Transition Acquired Contract Calculation Preference	Select a Template from the drop-down list. Note: This field is available only if you selected Full Retrospective from the TransitionMethod drop-down list.
   Prospective Reinsurance Contract This page is available only if you enabled the Reinsurance Held Ffield.
   Calculation Method	Select a method from the drop-down list. The available methods are: General Measurement Model Long Duration Contracts Premium Allocation Approach Variable Fee Approach
   Calculation Preference	Select a value from the drop-down list. Note: PAA YTD Templates work only when input variable data is given as a download. Therefore, when PAA YTD Templates are selected, then do not select ‘Compute Expected and Actual’ and ‘Compute Expected’ under the ‘Calculate Input Variable’ within a ‘Level of Aggregation’ selection.
   View More	After selecting a Calculation Method and Preference in this pane, clicking this icon opens the Direct Insurance window. In this window: Select a Calculation Method and Preference from the Calculation Method and Calculation Preference fields, respectively. Click Add. Multiple Calculation methods with the required preferences can be added. Click Close to close the Direct Insurance window.
   Acquired Contract Calculation Preference	Select a value from the drop-down list. Note: This field is displayed only if you have enabled the Acquired Contract Option.
   Transition Method	Select the type of transition method from the drop-down list. The available options are: Fair Value Approach Full Retrospective If the FullRetrospective Method is selected and the AcquiredContract Feature is enabled, then for Direct Insurance two Acquired Contract Templates are Configurable, one for regular use and one for transition. Note: This field is displayed only if you have enabled the Transition Option.
   Transition Calculation Preference	Depending on the method that you selected in the Insurance Contract Calculation Method field, the Transition Calculation Method field is populated with the required values. Select the type of Transition Calculation Preference from the drop-down list. Note: This field is displayed only if you have enabled the Transition Option.
   Transition Acquired Contract Calculation Preference	Select a Template from the drop-down list. Note: This field is available only if you selected Full Retrospective from the TransitionMethod drop-down list.
   Retrospective Reinsurance Contract pane. This pane is available only if you enabled the Include Retrospective Reinsurance field.
   Calculation Method	Select a method from the drop-down list. The available methods are: General Measurement Model Premium Allocation Approach
   Calculation Preference	Select a value from the drop-down list. Note: PAA YTD Templates work only when input variable data is given as a download. Therefore, when PAA YTD Templates are selected, then do not select ‘Compute Expected and Actual’ and ‘Compute Expected’ under the ‘Calculate Input Variable’ within a ‘Level of Aggregation’ selection.
   View More	After selecting a Calculation Method and Preference in this pane, clicking this icon opens the Direct Insurance window. In this window: Select a Calculation Method and Preference from the Calculation Method and Calculation Preference fields, respectively. Click Add. Multiple Calculation methods with the required preferences can be added. Click Close to close the Direct Insurance window.
   Acquired Contract Calculation Preference	Select a value from the drop-down list. Note: This field is displayed only if you have enabled the Acquired Contract Option.
   Transition Method	Select the type of transition method from the drop-down list. The available options are: Fair Value Approach Full Retrospective Note: This field is displayed only if you have enabled the Transition Option.
   Transition Calculation Preference	Depending on the method that you selected in the Insurance Contract Calculation Method field, the Transition Calculation Method Field is populated with the required values. Select the type of Transition Calculation Preference from the drop-down list. Note: This field is displayed only if you have enabled the Transition Option.
   Transition Acquired Contract Calculation Preference	Select a Template from the drop-down list. Note: This field is available only if you selected Full Retrospective from the TransitionMethod drop-down list.

3. In the Level of Aggregation pane, click Add and select the required level of aggregation definitions from the Level of Aggregation list. For more information, see Level of Aggregation.

   Figure 4-19 The Level of Aggregation List Window

   
   

   

   
   
   The LOA is added to the Level of Aggregation pane.

   Figure 4-20 The Level of Aggregation List Window

   
   

   

   
   
   1. In the Assumptions column, click Launch Hierarchy to launch the scenarios tiles in a window.

      Figure 4-21 The Scenarios Tiles Window

      
      

      

      
      
   2. For each desired scenario, click the View icon to open the Assumption window.

      Figure 4-22 The Assumptions Window

      
      

      

      
      
   3. Populate the Assumption Form.

      Table 4-4 The LOA Assumptions and the Rates Window

      Field	Description
      Direct Insurance and Prospective Reinsurance Contract panes
      Interest Rate Curve	Select an Interest Rate curve from the drop-down list.
      Amortization Rate	Select an Amortization Rate from the drop-down list.
      Adjustment Factor 1	Select an Adjustment Factor from the drop-down list.
      Adjustment Factor 2	Select an Adjustment Factor from the drop-down list.
      Adjustment Factor 3	Select an Adjustment Factor from the drop-down list.
      Adjustment Factor 4	Select an Adjustment Factor from the drop-down list.
      Adjustment Factor 5	Select an Adjustment Factor from the drop-down list.
      Adjustment Amount 1	Select an Adjustment Factor amount from the drop-down list.
      Adjustment Amount 2	Select an Adjustment Factor amount from the drop-down list.
      Adjustment Amount 3	Select an Adjustment Factor amount from the drop-down list.
      Premium Recognition Pattern	Select a Premium Recognition Pattern from the drop-down list. Note: This field appears in the DirectInsurance pane. This field is available only if you selected the PremiumAllocationApproach Method in the InsuranceContractCalculationMethod field.
      Transition Configuration pane
      Initial Recognition Date	Click Calendar in this field and select the Initial Recognition Date from the Calendar.

   4. Click OK.
   5. Close the scenarios window to navigate back to the Liability Calculations (Create) window.
4. If you want to delete a Level of Aggregation from the Level of Aggregation pane, select the required Level of Aggregation and then click the Delete icon.
5. Click the View Variables icon to open the Input Variable window.

   This icon is only available if the Oracle Insurance Accounting Analyzer Application is integrated with the Oracle Financial Services Profitability Management Pack (OFS PFT).

   Figure 4-23 The Input Variable Window

   
   

   

   
   
6. In the Available Values section, select a value and then click the Move icon to include it in the Selected Values section.
7. Click OK.
8. In the Calculate Input Variable Column, against the required LOA, you select one of the following options from the drop-down list:
   • Compute Expected and Actual
   • Compute Actual
   • Compute Expected
   • Download Expected and Actual
9. In the Assumptions Column, click Launch Hierarchy adjacent to the LOA to open the LOA Assumptions and the Rates window.

   Figure 4-24 The Assumptions Window

   
   

   

   
   
10. Populate the LOA Assumptions and the Rates Window Form.

    Table 4-5 The LOA Assumptions and the Rates Window

    Field	Description
    Direct Insurance and Prospective Reinsurance Contract panes
    Interest Rate Curve	Select an Interest Rate curve from the drop-down list.
    Amortization Rate	Select an Amortization Rate from the drop-down list.
    Adjustment Factor 1	Select an Adjustment Factor from the drop-down list.
    Adjustment Factor 2	Select an Adjustment Factor from the drop-down list.
    Adjustment Factor 3	Select an Adjustment Factor from the drop-down list.
    Adjustment Factor 4	Select an Adjustment Factor from the drop-down list.
    Adjustment Factor 5	Select an Adjustment Factor from the drop-down list.
    Adjustment Amount 1	Select an Adjustment Factor amount from the drop-down list.
    Adjustment Amount 2	Select an Adjustment Factor amount from the drop-down list.
    Adjustment Amount 3	Select an Adjustment Factor amount from the drop-down list.
    Premium Recognition Pattern	Select a Premium Recognition Pattern from the drop-down list. Note: This field appears in the DirectInsurance pane. This field is available only if you selected the PremiumAllocationApproach Method in the InsuranceContractCalculationMethod Field.
    Transition Configuration pane
    Initial Recognition Date	Click Calendar in this field and select the Initial Recognition Date from the Calendar.

11. Click OK.
12. Click Save and then click Submit.

    The saved definition is displayed in the Aggregation Summary table on the Level of Aggregation window.

13. Click Submit.
14. For more information about OFS PFT, see Oracle Financial Services Profitability Management Pack User Guide.

The Audit Trail pane at the bottom of the Definition window displays the Created By, Creation Date, last modified by, and Last modification date details. The User Comments field enables you to add additional information as a comment.