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FAQ On GMM GI FVA Template (Doc ID 2983916.1)

Last updated on NOVEMBER 03, 2023

Applies to:

Oracle Insurance Accounting Analyzer - Version 8.1.2 and later
Information in this document applies to any platform.

Goal

1) MA->PV(LFRC)->Transitionary Balance->[PV Insurance Component At Inception]+[PV Investment Component At Transition]+[PV Expenses At Transition]-[PV Gross Premium At Transition]

Why is Insurance component at inception included here?

2) MA-> PV LFRC-> Insurance Finance Income or Expense->[Movement Analysis->Present Value Of Future Cash Flows (LFRC)->Insurance Finance Income or Expense->Changes In Future Service Due To Change In Financial Experience]+[Movement Analysis->Present Value Of Future Cash Flows (LFRC)->Insurance Finance Income or Expense->Effect of change in economic assumptions]+[Movement Analysis->Present Value Of Future Cash Flows (LFRC)->Insurance Finance Income or Expense->Change in Liability Due to Change In Discount Rate]+[Movement Analysis->Present Value Of Future Cash Flows (LFRC)->Insurance Finance Income or Expense->Change in Liability Due to Difference in Locked In Rate and Current Rate Computation Of Future Service Impacting CSM]+[Movement Analysis->Present Value Of Future Cash Flows (LFRC)->Insurance Finance Income or Expense->Unwinding Of Discounting]

Consider the formula for : |===>Change in Liability Due to Difference in Locked In Rate and Current Rate Computation Of Future Service Impacting CSM

This says change in liability due to difference in current period vs locked in discount rates : However, there is no variable with current discount rate.

3) Premiums Pertaining To Current Or Past Service Expected To Be Received During The Current Reporting Period

What is the data required for this variable. How is variable different from "Expected Gross Written Premium In Reporting Period"

4)Actual Premiums Pertaining To Current Or Past Service Received During The Current Reporting Period

What is the data required for this variable. How is variable different from "Actual Gross Written Premium In Reporting Period"

5) MA->PVLFRC->Cash Outflow-> Why are cash outflows considered in LFRC. As per your last response :"The claims and expenses that are incurred in the reporting period are taken out of LFRC through ‘PV-LFRC -> Cash Outflows’ and moved to LIC through ‘PV-LIC -> Incurred Claims’." Please can you elaborate more on this, suppose if this formula is removed, what impact will it have on LFRC. Also under outflows why are PV variables considered

6) Consider a scenario with fic_mis_date='31-dec-2022', we will be having 3 set of cashflows, 1) FIC MIS date = 31-dec-2021 which is the transition date, 2) FIC MIS date='1-jan-2022' for inception cohorts i.e. new business 3) 31-dec-2022 which will have PV claims, expenses, premiums incurred during the report period and revision to prior period claims, expenses, premiums. Would a revision also required to be provided to inception cohorts or only prior period cohorts (i.e revision at 31-dec-2022)?

7) Why are following variables not a part of GMM GI FVA TEMPLATE?

Expected Claim Handling Expenses In Reporting Period
Expected Insurance Component In Reporting Period
PV Insurance Component At Report Date Using Start Data and Start Of Reporting Period Discount Rate
PV Revised Insurance Component At Report Date Using Current Discount Rate
PV Revised Insurance Component At Report Date Using Locked In Discount Rate
PV Insurance Component At Report Date Using Start Data and Locked In Discount Rate
PV Revised Insurance Component At Report Date Using Start Of Reporting Period Discount Rate
PV Gross Claims At Transition

Some of these are present in GMM DEFAULT TEMPLATE


 

Solution

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In this Document
Goal
Solution
References


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