Actuarial Support

Plan and Ratebook Definition

The following features simplify plan definition:

  • Rules-based design means processing is controlled by rules or parameters specified for the plan of insurance. Rules are maintained without program changes, and include group rules, product rules, rate tables, administrative files, and contract files.

  • Interest rates, premium rates, mortality and risk rates, expense charges, policy values, and other variables can be defined and maintained by non-technical personnel.

  • The FIMMAS database design supports relationships between customers, policies, groups, agents, companies, reinsurers, and other entities. Plan and Ratebook functions are integrated with FIMMAS capabilities for New Business Administration, Billing and Anniversary Processing, Agent Administration, Commission Processing, Policy Administration, and Reporting.

  • Templates for plan and benefit types that can be cloned for quick implementation.

Maintenance of Product Rules and Rates

All plan and rate information is added to the system by authorized users via maintenance features. Files may be imported from outside sources, such as spreadsheets. As soon as the plan and rate information is entered, the plan is available for all standard insurance processing. No recompiling or relinking of programs is needed to set up a new plan. Due to the built-in flexibility of plan information and rate file structures, a single plan code can support adult and juvenile, male and female, smoker and nonsmoker, banded rates, and other variations. The same rate tables may be shared by multiple benefits.

Product rules and ratebook information are designed to be maintained by authorized users via easy-to-navigate input screens. This maintenance capability extends to the following:

  • Plan, benefit, coverage, and rider rules and limits

  • State approval information

  • Actuarial rate tables—premiums, reserves, cash values, dividends, etc.

  • Interest rates

  • Loading rates, expense charges, and policy fees

  • Date bands and face amount bands

  • Surrender charge rules

  • Premium calculation rules

  • Billing and collection rules

  • Dividend and valuation rules

Each benefit in FIMMAS points to a rate table. An update to the table updates rates for all affected certificates. Rate files are date banded. Revised rates can be loaded to a new date band without replacing previous rates. Once the changes have been entered under the new date band, the rate change becomes effective as soon as that date is reached.

Riders and Benefits

The same flexibility available for defining a base policy is available for defining riders and benefits as well:

  • A policy can have an unlimited number of riders and benefits.

  • The commission rate for riders and benefits can be the same as the base policy, or specific to that rider.

  • A specific risk class and substandard rating may be applied to each rider.

  • An unlimited number of other individual insureds can be specified as riders on a single policy.

  • FIMMAS supports current and guaranteed cost of insurance rates for riders.

  • FIMMAS supports a level, scheduled increasing, scheduled decreasing, or varying amount of benefit for riders.



Valuation Processing

FIMMAS provides the ability to extract policy valuation information required for valuation calculations and reports as of the valuation date. This enables the user to run valuation calculations and reports without hindering day-to-day policy administration activities. Valuation extract files may be retained on the system—or on backup media—as long as needed. Valuation extract files from two or more reporting periods can be on the system at the same time to facilitate comparative analysis. 

FIMMAS supports CRVM and Net Level reserves. When defining a plan, users specify the reserve basis. The tax reserve basis for a plan can vary by era. There is no need to establish different plan codes for different eras. 

The reasons for each coverage or rider may be separately specified. Reserves may be calculated from mean or terminal reserve factors; or may be based on tabular cash value, accumulated fund value, surrender value, or unearned premium (gross or Rule of 78). Reserve factors are stored in rate tables. Factors can be generated outside FIMMAS, saved in a standard spreadsheet or ASCII file format, and uploaded into FIMMAS. Factors can also be maintained using FIMMAS screens.



Reserve Reporting

FIMMAS provides a full battery of valuation reports for Statutory NAIC Reporting, Tax Reserves, and GAAP Reserves. This includes reserves and liabilities corresponding to Exhibits 7, 8, 9, 10, and 11 of the U.S. Statutory Annual Statement. FIMMAS also provides Premium Accruals (Due, Deferred, Advance, Unearned) on a gross or net basis, and Policy Exhibit, Schedule "T" Premium Distribution, and State Page information. 

FIMMAS includes GAAP factor tables for both reserves and premiums. This includes breakdowns of Benefit Reserve, Deferred Acquisition Cost, Expense, and Deferred Profit components. FIMMAS provides reserve, premium, and FASB 97 reports for use in GAAP financial statements. 

FIMMAS also provides valuation extracts for integration with external valuation or reporting systems.


Guideline Premium Compliance

For plans that are qualified as life insurance under the Guideline Premium/Corridor Test, FIMMAS checks the Guideline Premium Limit each time a premium transaction is processed. The Guideline Premium Limit is the maximum premium that can be paid per year according to federal regulations. 

The Guideline Premium Limit is calculated by the system based on historic guideline premium information. If a premium transaction will cause actual premiums applied on the contract to exceed the Guideline Premium Limit, the system provides a descriptive warning message in the Premium Receipts Journal.


Valuation for Reinsured Amounts

FIMMAS includes processes for valuation of reinsured amounts. The reinsurance contract records are copied to the Valuation module as of the valuation date. The reinsurance treaty rules include reserve calculation rules and tables. All calculated reinsurance reserve and premium values are stored in contract reinsurance valuation records. Reports for the various reinsurance exhibits are generated from these valuation records and from accounting records.


Claim Reserves

The FIMMAS Valuation module provides calculations and reports needed for Claim Reserves. Contract and claim records are copied to the Valuation module as of the valuation date. These "frozen" contract and claim records are used to calculate claim reserves for pending life claims and for repetitive payment (waiver, disability, annuity) claims. Reserve calculations are done for amounts due and unpaid as of the valuation date and for the present value of amounts not yet due. All claim reserve calculations are controlled by rules and tables defined at the benefit level. All calculated reserves are stored in contract valuation records. Reports for the claim exhibits are generated from these valuation records and from accounting records.

Since 1982, Management Data, Inc. has specialized in insurance administration software solutions.

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