11.7. Life Business Calculation Rules
The following rules for Life Businesses can be configured within the Life Business Calculation Rules module. These rules apply to Life business and can be configured either at the Assumed Business level or on the Outward Cedent’s Contract, where relevant.
Access to administering these rules is governed by the ‘Life Business Calculation Rules’ security use case.
| Field | Description |
|---|---|
| SAR Calculation Basis Rule | Values: When the system parameter Activate SAR Calculation Basis is selected, you may set up the SAR Calculation Basis Rules. The flexible Sum at Risk Calculation Rules can now be defined and these rules will be available for selection as Calculation Basis on the Sum at Risk condition on the assumed business. When the %IsCeded variable is used, then the cession variable refered to in the calculation rule will be used to calculated the retroceded sum at risk on the retrocession for cessions where the Ceded flag is selected. Example:(#IF ( %isCeded ) #THEN (#FUNC performCalculation: ‘update-reserve’ )+( #FUNC performCalculation: ‘update-deductible’)+(#FUNC performCalculation: ‘update-salary’)-((#FUNC performCalculation: ‘update-freeCoverLimit’ )*%otherGroupInfo1/100) #ELSE %sumAtRisk #END) A calculation rule defined as above will do the following when the RPO is run: 1. All the rules that have been defined with the rule name update- Relevant when: The SAR Calculation rule functionality makes it more flexible to process the retrocessions using a value that is calculated, for example when the retrocessions are to be processed using a Net Sum at Risk value or a Gross Underwriting Amount value instead of the Sum at Risk alone. Applicable for: Life |
| Claim Liability Calculation Rule | When the Claim Liability Basis on the Sum at Risk condition is defined as ‘Not Sum at Risk Reinsured’ this claim liability calculation rule will be applicable. Using the Cession and Claim Variables, a rule can be set to use the values from various fields of the cession or claim along with the arithmetic formula in order to calculate the outward claim recovery. This will be applicable only to outward claims that have the Ceded Paid status. Eg: The outward claim ACI for a Ceded Paid claim is calculated by applying the ceded percentage to the inward claim ACI. The Ceded Percentage is calculated using the inward sum at risk and the retroceded sum at risk. However, the calculation rule can be defined to use other fields to calculate the ceded percentage, such as Sum at Risk+ Reserve on the inward cession. Applicable for: Life |
| Cash Surrender Calculation Rule | The agreed formula that may be applied to the Cash Surrender Value tables is defined here using the variables, operators and functions available. All the formula that has been defined here will be available for selection to be applied to the the Cash/ Surrender Value Table that has been defined on the Proportional Premium condition of a business. Note! The formula is informational and will not be used in any actual calculation Applicable for: Life |
| Prop Premium Calculation Rule | When the Proportional Premium is defined as a Rate Table or as a Multiple Premium Table or when the flag ’ Rate/ Amount from Cession Benefit transaction’ is selected, a Premium Calculation Rule that will either override the rate option defined on the PM condition or apply an additional formula or a percentage to the rate or amount may be defined as a Proportional Premium Calculation Rule. Three predefined calculations under Calculated Values are also available namely ‘Split by Sum Insured Range’, ‘Premium Rate from Cession Benefit’ and ‘Premium Amount from Cession Benefit’ When Multiple Premium Rate tables are linked to the Prop Premium Condition, a calculation rule can be defined to apply specific factors or to use a combination of all the tables while calculation the premium ACIs on the cession benefit
 Applicable for: Life |
| Profit Commission Calculation Rule | It is possible to define a Profit Commission Calculation rule which can be selected on the Profit Commission Condition.Example: A rule, eg Rule A as below can be defined to calculate the Income Less Outgo based on the entry code groups for the current accounting period  This rule, Rule A can then be included in the Profit Commision Calculation Rule ,where depending on the result of Rule A, the order will calculate the profit commission as either 50% or 80% of the calculated value.  Applicable for: Life |