Price Correction Prototype

OIPA needs the ability to perform multiple fund price corrections as one unit of work. The PriceCorrection business rule configured at the company level allows this to be accomplished.

Scenario

A domestic company receives a price correction for Variable Fund 1, dated 1/5/2010. There are two policies for Plan A and two policies for Plan B that have activities with effective on or after 1/5/2010 and have processed Fund 1 as of 1/5/2010. Therefore these activities will need to be rolled back. Additionally for Plan B, there are two other policies – one has no activities dated on or after the effective date of the price correction. The other only activities have a PriceCorrectionIndicator set to “No”.

A company level price activity is processed in OIPA. The activities will be rolled back and corrected only for the two affected policies on Plan A and the two affected policies on Plan B.

Prototype Examples

In order to configure the Company Level transaction, a new Company level Plan was added to the International Holding Company: International System Plan. Then, the CompanyLevelPriceCorrection transaction, which contains the attached PriceCorrection rule, was added to the newly-created International System Plan.

The International Child Company’s Unit Linked Template Plan uses Inception (non-Point-In-Time) valuation method. Best practice for implementing Price Correction functionality with Unit Linked products, for “price correctable” transactions that perform removals (via withdrawals or transfers) is to configure them with “Switch” and “Withdrawal” Assignment Types only.

  • The CompanyLevelPriceCorrection transaction was added to the International System Plan. It performs two tasks:
    • It updates Base, Bare, and/or Offer Unit Value(s) in the AsNetAssetValue database table for fund(s) selected in the fund MultiField and passes it on to the <FundGUID> element of the PriceCorrection business rule. The Unit Value, Bare Unit Value, and Offer Unit Value MultiFields as of the date in the Correction Date MultiField on the Activity Details screen are passed to <UnitValue>, <BareUnitValue>, <OfferUnitValue> and <EffectiveDate> elements of the PriceCorrection business rule, respectively. As long as at least one of the unit values for any selected fund is different from the price used in the original activity, the unit value(s) for that fund will be updated accordingly. If no unit value for the funds selected in the fund MultiField is different from the original (or not entered in any of the unit value MultiFields), the fund’s prices will not be updated, and the rule will prevent the activity from moving on to the second task for this fund.

    • It identifies affected policies that processed activities which have a Price Correction Indicator set to “Yes” and have processed funds that have been selected as those requiring price correction (i.e. contained within <FundGUID> element of the PriceCorrection business rule), and have used the unit value that is being corrected as of the same date as the price correction date (i.e. date contained within <EffectiveDate> element of the PriceCorrection business rule). Navigate to Global Explorer |Transactions | CompanyLevelPriceCorrection (International System Plan ) to view the XML.

  • The Multifield-PriceCorrection business rule was attached to the transaction to collect pertinent Price Correction information and then pass it to the PriceCorrection business rule. This information includes funds that require correction, correction date, unit value, bare unit value and offer unit value.
  • The PriceCorrection rule was attached to the transaction to perform the two tasks described above: update the unit values and insert a “dummy” transaction. Navigate to the Attached Rules folder under the transaction to see the rule XML.

View in OIPA

  1. Log on to the International Holding Company in OIPA.
  2. Click Company and Company Activity on the Main menu.
  3. Select International System Plan from the Plan drop down box.
  4. Click the Add Activity link on the Secondary menu and select the CompanyLevelPriceCorrection activity from the drop down box.
  5. Enter an effective date the necessary correction information and click OK.
  6. Click the lightning bolt icon to the right of the newly added activity on the Activity screen. This will process the activity.
  7. Click the Tables option on the Main menu and select Unit Value. This will open the Unit Values table.
  8. Select International Child Company from the Company drop down.
  9. If Products are supported, select International Group and then Unit Linked Template Plan from Product and Plan drop down boxes
  10. Select Unit Linked Template from the Plan drop down box.
  11. Select the fund that was updated in the correction activity.
  12. Enter the Start and End date range that includes the effective date(s) of the correction(s). The results of the correction will display.

Best Practices

Best practice for implementing Price Correction functionality with Unit Linked products, for “price correctable” transactions that perform removals (via withdrawals or transfers) is to configure them with “Switch” and “Withdrawal” Assignment types only.