Oracle® Insurance Policy Administration 9.4.1.0 E23637_01

# Full Surrender

A Full Surrender occurs when an annuity owner decides he or she wants out of the contract and will surrender the annuity with or without a penalty. Most companies charge a surrender fee if the owner decides to cancel the contract within the first seven to eight years of owning it. As a general rule, the shorter amount of time elapsed in the annuity, the more surrender fees the issuing company will require. For example, if the annuity has a seven-year surrender period, and it is surrendered in the first year, then the owner may pay seven percent of the value of the investment to the company. However, if surrendered in the second year, then the owner may pay only six percent, and so on.

In the Product Templates the following items are deducted from the contract value.

- Surrender charges

- Un-recovered rider charges

- Un-recovered anniversary charges

- Bonus recaptures

After processing a Full Surrender activity, a disbursement activity is automatically generated. Once the disbursement activity is processed, the policy status changes from active to surrendered and the user will not be able to add new activities to the policy.

### Steps to Add Full Surrender Activity

1. Open the Variable Annuity policy that should be surrendered.
2. Click the Add Activity link on the Secondary menu.
3. Select FullSurrender from the Activity drop down box.
4. Enter an effective date for the policy surrender.
5. Select a disbursement type.
6. Select an address from the Address drop down box. If no address exists, use the Client link on the Main Menu to open the Client screen. Search for the client record and add an address. Once an address is added to the client record, it will be available in the Address drop down box for the activity.
7. If the surrender charge can be overridden, then click the check box below the Address field.
8. Select the payment recipient.
9. Select the Payout Method.
10. Click the Withholding link at the top of the Activity box.
11. Enter the withholding information and click OK.
12. Click the lightning bolt icon to the right of the activity on the Activity screen. After this activity is processed, a disbursement activity will be automatically generated.

Details and Withholding Sections of FullSurrender Activity

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