Multiple FAC example produces wrong results

[johcarter]

Matt Jones:
(Two location level fac contracts (for both locations in policy 1) and then one policy level fac (at the same inuring level and covering the same locations (in account 1, policy 1) as the location level fac. And then a separate account level Fac contract covering account number 2.)

For the Account level Fac the PolicyNumber is set to 1, but it should be NaN (there is no PolicyNumber 1 in Account 2).

I think there is an issue when we have two contracts that are at the same inuring priority (and so do not inure to the benefit of each other) – the location contracts seem to inure to the benefit of the policy fac here despite the inuring level being the same:

I experimented with some changes to see how the fac policies interact at the same inuring level:
• Changed the two location facs to RiskLimit= 99 (RiskAttachment = 0 still) (ie 99 xs 0)
• Changed the RiskAttachment of the policy fac to 190, leaving the RiskLimit = 10 (ie 10 xs 190) .
Given that the two location insured losses are 100 each (200 to the Policy) I would expect a recovery of 99 from each location level fac and a recovery of 10 from the policy level fac. Total recovery = 99+99+10 = 208. However the insured loss is only 200 so the system should prevent an over recovery and show a net loss of zero on locations 1 and 2 when viewing at the policy level (ie the impacts of location and policy level fac).

This isn’t what happens – instead the Policy level fac is not producing any recoveries – it seems to me it is acting like the location level fac inures to the benefit of the policy level fac (even though the inuring priority is the same and so it should not be doing this – rather the Policy level fac should be acting independently of the location level fac with a check that the net losses at policy level are never zero).

I tried experimenting by changing the inuring level of the Pol fac contract to 2, but this caused the script to crash at step 8 (screen shot at end of email)

[sambles]

Did the crash happen on the master branch? it seems to run in dev

[johcarter]

Oasis can't handle an independent calculation of two contracts (eg loc and policy fac) covering the same location because of the simple heirarchy constraint in the design. Instead location inures to the benefit of policy which inures to the benefit of account.

[aiste-kalinauskaite]

Is this an issue on both of the scenarios or just one of them?

2 policies each have 2 locations: Policy 1 has locations 1 and 2 and policy 2 has locations 3 and 4.

Scenario 1
LOC FAC applies for locations 1 and 2 (two separate fac contracts) with inuring priority 1
POL FAC applies for policy 1 with inuring priority 1

Scenario 2
LOC FAC applies for locations 1 and 2 (two separate fac contracts) with inuring priority 1
POL FAC applies for policy 2 with inuring priority 1

[mpinkerton-oasis]

@johcarter can this be closed? Seems quite old.