US GAAP Link Modules

Many actuarial calculations under US GAAP ASU 2018-12 require unlocking of the input data and assumptions using actual experience. Therefore, the collection and management of significant amounts of actual history has become a critical step in the US GAAP financial reporting process. The US GAAP Link module provides a robust data management solution, allowing historical actuals (up to the prior reporting date) to be stored in a centralized database external to the AXIS dataset. Updated and current period actuals can then be imported through a DataLink process. The actuarial calculations will coordinate the inclusion of both historical actuals, updated actuals, and current period actuals. At the end of the reporting process, any updated actuals, the current period actuals and certain results calculated by the AXIS model, which could include the "estimated actuals" calculated by AXIS can be added to the external database for use in the next reporting period, with the entire process subject to governance and controls managed within EnterpriseLink.

Re-measurement and roll forward of the actuarial balances require the use of multiple actuarial Assumption Sets and multiple seriatim data models from different time points. The US GAAP Link modules enhance the usual AXIS model input by allowing both Current Period and Prior Period actuarial assumption sets as Cell input in a single model. Additionally, Valuation date, Period start, possibly including actual transactions, and New business seriatim inforce files can be referenced by the same AXIS model. Also provided is a new "Disclosure Object" which allows users to control the granularity of the reporting of the impacts of cash flow assumption changes and experience adjustments for the LFPB, DPL, Ceded LFPB, and CoR roll forwards and the impacts of changing markets and scenarios for the MRB roll forward.

Valuation cash flows that are produced by other systems can be included in AXIS US GAAP ASU 2018-12 calculations through the use of "US GAAP Imported Cashflows" Datalink tables. These tables capture the cash flows by cohort and subcohort (if included) for the various valuation projections needed to determine balances for the start of the reporting period, revalued period start amounts, any new business added in the reporting period, and balance at the valuation date, including providing cash flows for all the desired breakdowns of cash flow assumptions and experience adjustments. Imported projection results for a cohort or subcohort can be in addition to AXIS produced cell results or be entirely separate.

A new "US GAAP Current Reporting" batch type has been added to efficiently handle the coordination and sequencing of all actuarial calculations required for current period US GAAP reporting. Beginning at the prior reporting date, this Current Period Reporting batch will produce all current period actuarial balances, as well as components necessary for the re-measurement gain/loss, other comprehensive income, and roll forward disclosures. Within the batch, users can select for the batch to be run as a "Transition" process (i.e. perform only those calculation needed at the ASU transition date) or run the batch as a "Standard" reporting period process. And, for a "Standard" reporting period process, users can select to only run specific portions of the full current reporting period calculations, such as choosing to only run the calculations at period start, or only the calculations needed to evaluate any basis change.

Processing of cohorts and subcohorts for US GAAP ASU 2018-12 places greater demands on system performance as more calculations and reporting are necessary to satisfy all the requirements. For runtime, the "US GAAP Current Period Reporting" batch is a specialized run which will perform only the calculations and store only the output necessary for current period US GAAP reporting, while optimally sequencing all calculations, leading to a significant runtime improvement over multiple conventional Batch processes. For memory usage, AXIS cohort and subcohort processing have been structured to minimize the amount of memory needed during the higher-level processing of the cohort and subcohorts. Additionally, AXIS provides for users to control the processing of cohorts in the higher-level, selecting to process with all cohorts in memory, process with only one cohort in memory at a time, or let AXIS determine the processing mode dynamically. The memory usage optimization and feature is available for both base liability module projections as well as US GAAP Current Reporting batch runs.

Multiple instances of US GAAP Pricing Cohort detail results are automatically produced from the "US GAAP Current Reporting" batch, eliminating any need to manually extract and consolidate roll forward information from multiple sets of reports generated by separate batch steps. By using the results of the multiple instances of the detail reports, users can easily develop custom reports in AXIS which meet their specific needs for disclosure roll forwards.

Periodic experience analysis is required to support the decision to unlock future cash flow assumptions. To support this need, the US GAAP Link modules include access to Earnings by Source and Experience Studies capabilities. Provided that actual policy movement transactions are being captured in DataLink and linked to inforce policies, the AXIS system can generate seriatim reports that include census and exposure information and both actual and expected seriatim policy movement details on a policy count or face amount basis.