Insurance Terminology

Policy - A contract of insurance, describing the term, coverage, premiums and

deductibles.
保單是投保人與承保人之間的合法合約文件, 內有合約條款及細則。

Term - An insurance policy covers the insured party (known also as the insured or the
policyholder) for a specified period of time, called a term. Policy terms commonly range
from six months to many years. At the end of that term, the seller and buyer may agree to
renew the contract if they wish. Only permanent life insurance does not specify a finite
term. These policies, also called ordinary life insurance or whole life insurance, commit
the insurance company to provide coverage for the lifetime of the person insured.
保單之保障有效期限。

Conditions
在保險合約中將陳述受保人和承保人的權利和責任。這些條件將與在某種環境中所發生的事件或行為或過
程有關, 如財物的損失。

Deductible - Insurance policies generally include an initial amount of expense that an

insured person must pay when a loss occurs. This expense is known as the policy’s
deductible. The deductible is the amount of loss a policyholder agrees to pay without
protection from an insurance company.
Selecting a $500 deductible on auto insurance, for instance, equals an agreement to pay
up to $500 for damage to a car in the event of an accident. Under such an agreement,
the insurance company will pay for losses exceeding $500. Therefore, if someone
holding such a policy has an accident costing $1000 to repair, the insurance company will
pay $500 toward that repair.
The premium for an insurance policy varies according to the level of its deductible. For
example, a policy with a $500 deductible costs less than one with a $250 deductible,
because the lower the deductible, the more the insurance company has to pay for a loss.
墊底費。這是投保人同意於每次索償時保險公司不負責賠償而需投保人支付特定金額。

Coverage –
Different types of insurance policies provide different amounts of coverage. They also
provide coverage in different ways. Some policies, such as life insurance, determine an
amount of coverage in advance. An insurance company pays the full amount of such a
policy, called its face value, whenever a covered loss occurs. Most other types of
insurance policies determine how much to pay according to what kinds of losses
policyholders experience. Such policies specify a maximum amount they will pay. For
example, a policy covering a home against fire for $100,000 would pay for damages up
to $100,000, but no more.
Policyholder - The owner of an insurance policy; usually, but not always, the insured.
合法擁有該保單的保單持有人, 通常亦為受保人, 但保單持有人亦可以是受保人之親屬或公司。

Dependant
財政上依靠投保人之配偶或子女。

Insured - The person, group, or property for which an insurance policy is issued.
受保人。

Insurer - The party to an insurance arrangement who undertakes to indemnify for losses.
承保人。通常為保險公司。

Certificate of Insurance
發出予投保人或團體保險計畫的成員的文件。這個證明書包括保障之大綱與限制。

MPF - MPF is abbreviation for Mandatory Provident Fund

強積金

ORSO - ORSO is abbreviation for Occupational Retirement Scheme Ordinance

職業退休計劃供款

RB - RB is abbreviation for Retirement Benefit.

退休收益计划

Policy Limit - An insurance policy covers the insured party (known also as the insured or
the policyholder) for a specified period of time, called a term. When choosing an
insurance policy, a person must decide what type of coverage to buy. This means
deciding at what dollar amount of loss the coverage will begin (known as the deductible)
and at what amount coverage ends (known as the policy limit). Both influence the cost of
a policy, which is expressed as the price of a regular, repeated payment (known as the
premium).

Premium - A regular periodic payment for an insurance policy. An insurance company

sets a policy’s premium by multiplying a rate for each unit of insurance coverage by the
total amount of coverage being purchased.
保費是保單持有人為使保障生效所需要繳付之金額。

Claim - Insured individuals who have suffered losses and want to receive payments must
notify their insurance company through a process called a claim. Insurance contracts
always contain a condition that the insured must provide a proof of loss in order to be
paid.
投保人因受保項目之損失或損害向保險公司提出之賠償要求。
Trust - A legal arrangement in which an individual (the trustor) gives fiduciary control of
property to a person or institution (the trustee) for the benefit of beneficiaries.
給予某人或組織擁有控制第三者財產之權力的合法形式。
In MPF
An organization chooses a policy and then he becomes a "policy holder".
The Organization/holder is assigned a scheme no.(8 digit alphanumeric)
Policy number (for each employer) = scheme no. + '04GR'
So for each employer a unique 8 digit scheme number is generated and then appended
with 04GR to make a unique 12 character policy number.
For each of the employees of the organization there is a "certificate no."(10 digits
alphanumeric)
The certificate no is ideally derived from the Hong Kong ID of the employee example
HKID R123423(6) could be 123423R
So for each policy number there are one or more certificate numbers.

In RB
There are different types of policies i.e Life,DI, health and RB (retirement benefit). We
have to focus only on RB policies.
Here “scheme number” is called "policy holder number".(6 digit alphanumeric)
Policy number (for each employer) = policy holder number + '04GR'
So for each employer a unique 6 digit policy holder number is generated and then
appended with 04GR to make a unique 10 character policy number.
The concept for certificate number is not same as in MPF with the difference that its
length in RB is 7 character
Also the certifcate # in RB can be running seq # of derived from HKID. Based on flag
setup for the company it will auto generate running seq or manual entry.

Both MPF and RB systems maintain records for the subsidiaries/sister concerns of the
organizations that have enrolled into their respective schemes.
Each subsidiary/sister concern share the same scheme no(MPF) / policy holder number
(RB) but are assigned aff company codes like 01,02 and so on.

There are total 12 sub-systems in MPF system. Billing, Commission, DCR, Fund
Transfer, Member Administration, Renewal Processing, Reserve Reallocation, Scheme
Administration, Standard Letter System, Termination, Valuation, Workflow system (WMS)

Billing - Under the MPF Ordinance, the employer has to submit Remittance Statement
together with payment to the trustee within 10 calendar days after the contribution period
end date. For the self-employed person, they can agree with the trustee whether
contribution will be made on a monthly basis or a yearly basis and they are required to
pay the contribution to the trustee on or before the contribution period end date. For
most cases, cash receipt management will be performed on a monthly basis. We will
send remittance statement (either blank remittance statement or remittance statement
with pre-printed contribution) to client 7 days before the contribution period end date.
Then, the client will update the remittance statement and return to us within 10 calendar
days of the contribution period end date together with payment. Alternatively, the client
can use its own payroll system to generate electronic record, EDI file, to us. After
receiving the remittance statement or EDI file, we will update contribution data to system.
Upon completion of data processing and receipt of payment, we inform investment
service to proceed with fund purchase. Besides, system will also perform da

Commission - Commission is the compensation paid to agent after they have made
business with client on behalf of AXA. The commission is a monthly payment, depending
on the amount of contribution settled. The MPF system will calculate the amount of
contribution and commission and pass the data to Agency system for payroll.

DCR - Contribution Collection is used for collecting contribution for mandatory and non-
mandatory account. There are 2 methods,

• Cash/cheque Payment
• Autopay

Clients are allowed to select either one of the collection methods. Autopay is available for
self-employed clients only.

Fund Transfer - Fund transaction module is mainly prepared for fund purchase and
redemption reporting. Following transaction will involve fund transaction
1. Bill Settlement
2. Termination
3. Bill Reversal
4. Reinstatement
5. Reserve Reallocation/Fund Switching

All these transactions involve money received and paid out. For received money, it will
be used to purchase investment fund as chosen by the client. On the other hand, when
the accrued benefit is withdrawn, the fund should be redeemed and the dollar equivalent
will be paid to members. For reserve reallocation and fund transaction, although there
will be no money in or out, the accrued benefit in different fund is switched as chosen by
members.

Member Administration - When employees are enrolled to AXA MPF schemes, they
become members under the schemes and a unique certificate no. is assigned as the
identity. A member has to specify the basic information, income and the investment
portfolio. The operations on these files are performed by the member administration
module.
Functions provided:
Addition
This serves the function of employee enrollment and addition of employee benefits to an
existing employee. Enrolled employee will automatically become effective on date
eligibility due and a record change statement for enrollment will be generated and
reported when effective and due for billing become. Any new enrolled employee requires
to verifying by another user.

Changes
System keeps change history in class of benefit, relevant income, basic salary, affiliated
company code and contribution. Record change statement will be generated reported
only when become effective and due for billing

Amendment
This is used to update non-financial data such as name, sex, date of birth, etc. and is
also used to rectify data entry error. No change history is kept.

Termination
This serves the function of employee termination, vesting percentage,
overcharge/unbilled amount; cheque payee name can be override by user. Record
change will be generated and reported. Termination statement, cheque will be generated
in off-line. In addition, all termination benefit details will be generated to General Ledger
interface system automatically. (for details please refer to termination and transfer out
section)

Reinstatement
System will update the related employee record; record change will be generated and
reported. Cheque will be canceled in off-line procedure.

Renewal Processing - Renewal confirmation is an option provided by the on-line Policy

Administration application. Computer system renews a policy by automatically replaces
the current policy effective date by the anniversary date and updates the later by 1 year.
The system only allows renewal when there is no outstanding bill for the past policy year.
The on-line renewal function triggers the off-line anniversary processing.

Reserve Reallocation - The Module Description Manual describes how the different
modules of MPF (Mandatory Provident Fund) system of AXA China Region function and
operate (Version 1.0). It provides both functional and technical overview of that particular
module. The intended users for this document are AXA - China team / Management and
TCS team / Management.

Scheme Administration - According to the database structure of MPF system, every MPF
case is inputted into the system called Scheme. A scheme can be further divided into
parent and affiliated companies, account, class etc. The operation on these files is
performed by the scheme administration module.

Functions provided:

 Addition
This option is used to capture new scheme master, affiliated company, employer billing
option, policy master, policy a/c information and policy benefit class to the system.

 Changes
Service eligibility changes and vesting scale changes during policy year and policy contract
changes such as changes in contribution rate and mode of payment at anniversary. A new
record will be added due to the change. Each change is associated to an effective date.
Therefore, a history of contract changes is recorded. Backdate change is not allowed.

Changes affecting policy's modal contribution must be effective on policy's bill to date (future
change).

The computer system, basing on these movements, will off-line update all employees’
benefit history to record the current modal contribution to be effective in the next bill.
Employee records to be effective in future are also updated. Employee record change
transactions are generated to reflect adjustments in contribution due to the policy change.

Change of anniversary date is also allowed. However, it should be consistent with the mode
of payment and bill to date

 Amendment
This is a function available only to users of higher security level. It actually updates the
current record in computer without keeping any history and is normally used to rectify data
entry error.

 Renewal
This is used when renewal is confirmed at policy anniversary. Policy effective date and
anniversary date on the Policy contract is updated.

Scheme master, Affiliated company, Employer Billing Option, Policy master, Policy a/c
information and Policy benefits class are displayed for change. If there is any change, a
history record is kept. Effective date of change is taken to be the current scheme effective
date.

 Termination
This function terminates the policy and trigger renewal process request and process request
on termination effective date.
For detail descriptions of this on-line application, refer section in On-line Operation.

A Scheme Administration Activity Report is printed to serve as an audit trail for a day's
activities.

Standard Letter System - Standard Letter System (SLS) is a versatile and a centralized
system that works on a heterogeneous platform. It makes use of different technologies
that enables users to print different business letter. It also integrates with the Workflow
Management System (WMS) so that users can easily submit their print request. Besides,
SLS also has the capabilities that allow the printed letters faxed out and e-mail to other
recipients.

Functions provided:
 Define Variable
 Maintain template
 Print letter
 Maintain reason codes
 Enquiry failed fax
 Capture signature
 Maintain drawer table

Termination/Transfer - When members terminate or transfer from other trustee/scheme,

both the employer and member need to submit form list the transfer information. There
are 2 types of transfer form, Form AB and Form C. Form AB is form about details of the
member and should be captured for both transfer-out and transfer-in case. Form C
relates to the benefit amount transferred and therefore, should be captured for transfer-in
only. Once the forms are received, they will be captured by user into system and if
transfer-out case, user need to capture a termination request immediately after transfer
form capture. However, the relationship of transfer form and termination request is not
inter-dependent. Termination request can exist without having a transfer form.

Valuation - Monthly, all in force schemes (within the searching period for valuation) will
be selected to perform valuation on scheme reserve and reserve account.

Scheme reserve will be valued as at reporting month-end by company and by fund and
this figures will be reconciled with system fund reserves which are obtained by
performing the renew processing.

Workflow system - The main functionality of this system is related to the documentation
of WAF (Work Flow System).

It includes:
1) Creation of WAF Document from scanned documents in computer.
2) Indexing of the documents in Imaging System
3) Display/Search the documents in Imaging System
4) Keeping an Error Log by storing the records in the API Error Log File.