Oracle® Insurance Rules Palette
Annuities are retirement products that may be used to help an individual increase savings or generate a guaranteed stream of income. Annuities that are used to increase savings are called deferred annuities. Annuities that generate a stream of income are called income annuities. Many times both types of annuities are used to create a single product that has an accumulation phase (deferred annuity) and a payout phase (income annuity).
When both products are used to create a single product, annuitization must occur to change the product’s behavior from that of a deferred annuity to that of an income annuity.
The Annuitant can choose to receive the payments for life or for a specified period. In addition to choosing the length of time for the payments, the annuitant can choose the amount. The payments are driven by the types of underlying funds associated with the annuity. The funds associated with annuities can be either variable or fixed. Variable funds will be subject to market conditions and can vary during the accrual phase and the payout phase. Fixed funds on the other hand will increase by a specified percentage during the accrual phase and have a specific amount paid throughout the payout phase. If the annuitant outlives the period specified in the annuity contract (i.e. 20 Year Certain) payments will continue for the remainder of the annuitant’s life.
In OIPA, annuity products use Benefit Split functionality to generate a policy’s guaranteed payment stream upon annuitization. Funds may be variable, fixed or a combination of variable and fixed. This functionality as well as an enhanced Fund Allocation structure facilitates a seamless transition from the accumulation phase to the payout phase of a Variable Annuity product. The withdrawal transactions can also accommodate the situation when the annuitant outlives the contract through an overflow process.
Benefit Split records can be created for scheduled or nonscheduled benefit payments or for annual benefit leveling. Activities can also be used to emulate these behaviors as needed. XML tags and attached business rules support this functionality
If Benefit Split functionality is used, then all funds on the policy must be set up for Benefit Split.
There are three major components of the Benefit Split functionality:
OIPA Benefit Split on Segment Screen in OIPA
The following code names and values must be created to support Benefit Split.
AsCodeFundType 03: this code is for FixedBenefit. It is a zero interest, fixed annuity payout fund.
AsCodeBenefitSplitType 05: this code is for Current Benefit Segment. It is used for active benefit split records that are paying out.
AsCodeBenefitSplitType 51: this code is for Deferred Benefit Segment. It is used for deferred life contingent benefit split records.
AsCodeBenefitSplitStatus 01: this code is used to indicate Active status. It is used for active benefit split records.
AsCodeBenefitSplitStatus 99: this code is used to indicate Deleted status. It is used for segments that were deactivated due to recalculations and update activities.
There are four steps that must be taken before configuring Benefit Split.
Once the preliminary configuration steps are complete and the business rules and code names have been created, the actual benefit split configuration can take place. The significant steps involved in this process are shown below. Follow the links for additional information on any step in the process.
Refer to the Benefit Split Prototype to see an example of all configuration described below.
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