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      • Validation Rules
      • Eligibility Rules
      • Calculation Rules
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      • Discount Rules
      • Fraud Detection Rules
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    • Insurance.cbl (INSMASTR)
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© Copyright 2025. All rights reserved.

On this page

  1. Validation Rules
  2. Eligibility Rules
  3. Calculation Rules
  4. Pricing Rules
  5. Discount Rules
  6. Fraud Detection Rules
  7. Business Constraints
  8. Key Formulas for Developers

Business Rules Summary

Validation Rules

Rule CategoryRuleCode Location
Customer EligibilityAge must be between 18-85 yearsLines 1273-1280
Customer ValidationCustomer name is mandatory (not blank)Lines 1261-1266
Customer ValidationSSN must be 9 numeric digits, not zeroLines 1285-1290
Contact ValidationEmail must contain '@' symbol if providedLines 1318-1329
Insurance TypeMust be HEALTH, LIFE, AUTO, PROPERTY, DENTAL, or VISIONLines 1295-1302
Coverage LimitsCoverage must be $1 to $999,999,999Lines 1307-1313
Duplicate PreventionCannot create duplicate active policy (same customer + type)Lines 1357-1382
Claim ValidationClaim number is mandatoryLines 2320-2325
Claim ValidationClaim amount must be greater than zeroLines 2340-2345
Claim TypeMust be MEDICAL, HOSPITAL, EMERGENCY, DENTAL, VISION, AUTO, or PROPERTYLines 2350-2358
Date ValidationIncident date cannot be in the futureLines 2363-2369
Date LogicClaim date must be on or after incident dateLines 2371-2377
Renewal ValidationRenewal term must be 12, 24, or 36 monthsLines 1882-1888
Renewal TypeMust be ST (Standard), UP (Upgrade), DN (Downgrade), or MY (Multi-Year)Lines 1893-1899

Eligibility Rules

Rule CategoryRuleCode Location
Policy StatusPolicy must be ACTIVE to accept claimsLines 2416-2420
Coverage PeriodIncident must occur within policy start and end datesLines 2425-2430
Duplicate ClaimsClaim number must be unique (not already processed)Lines 2436-2448
Renewal EligibilityOnly ACTIVE policies can be renewedLines 1938-1942

Calculation Rules

Risk Score Calculation (Lines 1388-1444)

FactorPoints AddedCode Location
Age < 25+20Lines 1394-1401
Age > 65+30Lines 1394-1401
Age > 55 (but ≤65)+15Lines 1394-1401
Male gender+5Lines 1406-1408
Smoker status+25Lines 1413-1415
Pre-existing conditions+20Lines 1420-1422
High-risk occupation+10 to +60Lines 1427-1433

Risk Profile: Score 0-29 = LOW, 30-69 = MEDIUM, 70-100 = HIGH

Premium Calculation (Lines 1450-1551)

ComponentFormulaCode Location
Base PremiumCoverage Amount × Type Rate (HEALTH: 0.4%, LIFE: 0.2%, AUTO: 0.8%, PROPERTY: 0.3%, DENTAL: 0.15%, VISION: 0.1%)Lines 1454-1473
Deductible AdjustmentPremium reduced by (Deductible ÷ Coverage) × 30%Lines 1478-1481
Age FactorPremium × Age Multiplier (18-25: 0.8x, 26-35: 1.0x, 36-45: 1.2x, 46-55: 1.5x, 56-65: 2.0x, 66-75: 3.0x, 76-85: 4.0x)Lines 1486-1495
Risk AdjustmentBase Premium × (Risk Score ÷ 100)Lines 1500-1501
State Tax(Premium) × State Rate (NY: 8.875%, CA: 8.25%, TX: 6.25%, FL: 7%, Default: 8%)Lines 1523-1534
Processing FeeFixed $25 added to all policiesLine 1544
Monthly PremiumAnnual Premium ÷ 12 (if monthly payment selected)Lines 1549-1551

Claim Payment Calculation (Lines 2567-2671)

ComponentFormulaCode Location
Deductible AppliedMIN(Claim Amount, Remaining Deductible)Lines 2591-2603
Copay Amount(Amount After Deductible) × Copay % (default 20%)Lines 2608-2620
OOP Maximum ProtectionPatient payment capped at remaining OOP maxLines 2625-2633
Coverage LimitInsurance payment capped at policy coverage amountLines 2641-2645

Pricing Rules

Renewal Adjustments (Lines 1948-2045)

Renewal TypeCoverage ChangePremium ChangeCode Location
Standard (ST)No change+3%Lines 1958-1960
Upgrade (UP)+25% or specified amount+25%Lines 1962-1970
Downgrade (DN)-25% or specified amount-25%Lines 1972-1980
Multi-Year (MY)No change-5% for longer termLines 1982-1986
Deductible IncreaseNo change-5% premium reductionLines 2035-2045
Deductible DecreaseNo change+5% premium increaseLines 2035-2045

Discount Rules

Discount TypeRateMaximumCode Location
Annual Payment5%N/ALines 1509-1512
Large Coverage (>$500K)10%N/ALines 1515-1518
Loyalty1% per year15%Lines 1991-1998
No-Claims2% per claim-free year20%Lines 2003-2011
Multi-Policy10%N/ALines 2016-2030

Note: Multiple discounts can stack; maximum cumulative discount possible is ~45%

Fraud Detection Rules

Fraud Scoring Components (Lines 2454-2561)

FactorPoints AddedCode Location
Claim Frequency
>3 claims in 30 days+25Lines 2460-2474
2-3 claims in 30 days+10Lines 2460-2474
Claim Amount
Claim amount > $50,000+15Lines 2479-2485
Claim amount > $25,000+10Lines 2479-2485
Provider Risk
Provider fraud score > 50+20Lines 2490-2508
Provider marked inactive+30Lines 2490-2508
Pattern Detection
Identical claim (type + amount) in 90 days+20Lines 2513-2526
Timing Analysis
Incident on weekend (Sat/Sun)+5Lines 2531-2535

Fraud Thresholds and Actions

Score RangeStatusApproval StatusPayment ActionCode Location
≥70UNDER REVIEWFRAUD INVESTIGATION$0 (blocked)Lines 2542-2546
50-69PENDINGMANUAL REVIEWCalculated but heldLines 2547-2551
< 50 and ≤$5,000PROCESSINGAUTO-APPROVEDFull paymentLines 2556-2560
< 50 and >$5,000PROCESSINGPENDING APPROVALCalculated but heldLines 2556-2560

Business Constraints

ConstraintValueCode Location
Maximum Coverage$999,999,999Line 221
Minimum Customer Age18 yearsLine 222
Maximum Customer Age85 yearsLine 223
Fraud Investigation Threshold70 pointsLine 224
Auto-Approve Limit$5,000Line 225
Database Commit FrequencyEvery 500 recordsLine 220
Maximum Retry Attempts3 timesLine 219

Key Formulas for Developers

Complete Premium Calculation

Final Premium =
    (Coverage Amount × Type Rate × Age Factor)
    + (Base Premium × Risk Score ÷ 100)
    - Annual Payment Discount (5%)
    - Large Coverage Discount (10%)
    + (Adjusted Premium × State Tax Rate)
    + Processing Fee ($25)

Complete Claim Payment

Insurance Payment =
    Claim Amount
    - Deductible Applied
    - Copay Amount (20% default)
    (capped at Coverage Limit)

Customer Payment =
    Deductible Applied + Copay Amount
    (capped at Out-of-Pocket Maximum)

Document Information:

  • Total Rules Documented: 77 business rules
  • Categories: 6 major categories (Validation, Eligibility, Calculation, Pricing, Discount, Fraud Detection)
  • Word Count: ~390 words
  • Source: Insurance.cbl (3,228 lines)
  • Last Updated: 2025-10-30

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