Create HD step policy

Creates an interval (step) in an HD step policy.

An HD step policy is an insurance payment structure that follows a step-like function, where the payment amount is a prescribed value over a certain interval (step) and jumps to another prescribed value in an adjacent interval. HD step policies support both simple steps and interaction steps.

A step policy is defined by a unique ID (stepPolicyNumber) and two or more steps. Steps are ordered within the step policy by a numerical stepOrderId. Every step in the step policy is either a simple step or an interaction step. A step policy may consist wholly of simple steps or a combination of simple steps and interaction steps.

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Step Policy (DLM model)

Risk Data API also supports DLM step policies based on the DLM model framework.

To create DLM step policies, see the Create Policy

Simple steps

A simple step is a step interval that identifies a trigger for payout and criteria for triggering the payout. Payout is a constant, flat amount. Meaning that the Standard value is specified for the payoutFunction parameter.

The simple step is defined by an lob, causeOfLoss, inceptionDate, expirationDate, coverageBase, and limitGU parameters.

In simple steps, the childOrderId parameter is ignored and the value subjectFunction parameter is None.

Interaction steps

An interaction step defines functions (payoutFunction and subjectFunction) that operate on other steps (childOrderId) or limits that cap payouts.

In interaction steps, payout is defined as a limit. Meaning that the Step value is specified for the payoutFunction parameter.

Interaction steps do not use causeOfLoss for financial modeling because cause of loss is entirely determined by the simple steps, but Moody's still recommends coding causeOfLoss for all steps to facilitate querying all steps within a step program.

In interaction steps, the lob, causeOfLoss, inceptionDate, expirationDate, coverageBase, and limitGU parameters are ignored. The lob, inceptionDate, expirationDate, coverageBase, and limitGU parameters is not applicable to interaction steps.

Different parameters are required or ignored depending on the whether a step is a simple step or interaction step.