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© Copyright 2025. All rights reserved.

On this page

  1. Introduction
  2. Quick Start
  3. System Architecture Overview
  4. Key Technical Concepts
  5. Codebase Organization
  6. Business Context for Developers
  7. Important Notes
  8. Summary

Developer Overview

Introduction

The Insurance Management System (INSMASTR) is a comprehensive mainframe batch processing application built in Enterprise COBOL that handles the complete lifecycle of insurance operations. This system processes policy creation, renewals, and claims through a sophisticated sequential file processing model integrated with DB2 database operations.

Running on IBM z/OS, INSMASTR is a 3,228-line COBOL program that implements complex business logic including risk assessment, premium calculation, fraud detection, and customer management. The system is designed for high-volume batch processing with robust transaction management, comprehensive error handling, and detailed audit trails.

Technology Stack at a Glance:

  • Platform: IBM z/OS mainframe
  • Language: Enterprise COBOL with embedded SQL
  • Database: IBM DB2 (INSPROD)
  • Architecture: Monolithic batch processing with sequential file I/O
  • Processing: Batch-oriented with periodic commits (every 500 records)
  • Integration: JCL-driven execution with file-based data exchange

Quick Start

Getting Your Bearings

New to the INSMASTR codebase? Here's how to get started quickly:

  1. Read the Source Code Setup

    • Source file: Insurance.cbl (3,228 lines)
    • Program structure: 39 numbered sections (0000-9999)
  2. Understand the Processing Modes

    • The program accepts a JCL PARM: POLICY, RENEWAL, CLAIM, or ALL
    • Each mode processes different input files
    • Start by tracing through one mode to understand the pattern
  3. Explore Key Code Locations

    • Main control logic: Section 0000-MAIN-CONTROL (lines 853-879)
    • Policy processing: Sections 2000-2999 (lines 1139-1760)
    • Renewal processing: Sections 3000-3999 (lines 1766-2230)
    • Claims processing: Sections 4000-4999 (lines 2197-2845)
    • Error handling: Section 8000-ERROR-HANDLER (lines 2873-2941)

Development Environment Setup

To compile and run INSMASTR, you'll need:

  • IBM z/OS with Enterprise COBOL compiler
  • DB2 subsystem access (INSPROD database)
  • JCL for compilation (DB2 precompile → COBOL compile → Link-edit)
  • Test data files in proper formats

See the complete setup instructions in the Build and Setup Guide.


System Architecture Overview

High-Level Architecture

INSMASTR follows a classic mainframe batch processing architecture with three distinct processing pipelines:

Loading diagram...

Key Components

1. INSMASTR Program (Single Executable)

  • Monolithic COBOL program containing all business logic
  • 39 sections organized by functional area
  • Processes 3 input files, produces 5 output files
  • Maintains single DB2 connection throughout execution

2. Input Files (3 Sequential Files)

  • POLFILE: New policy applications (800 bytes/record)
  • RENFILE: Policy renewal requests (600 bytes/record)
  • CLMFILE: Insurance claim submissions (900 bytes/record)

3. Database Tables (5 DB2 Tables)

  • POLICY_TABLE: Master policy records (24 columns)
  • CUSTOMER_TABLE: Customer demographics (16 columns)
  • CLAIM_TABLE: Claims history (26 columns)
  • PROVIDER_TABLE: Healthcare provider directory (7 columns)
  • AUDIT_TABLE: Audit trail (referenced, 9 columns)

4. Output Files (5 Sequential Files)

  • POLOUT: Processed policies (500 bytes/record)
  • RENOUT: Processed renewals (500 bytes/record)
  • CLMOUT: Processed claims (500 bytes/record)
  • ERRFILE: Error records with messages (250 bytes/record)
  • RPTFILE: Summary statistics report (133 bytes/record)

Processing Model

INSMASTR uses a batch sequential processing model:

  1. Initialization: Open files, connect to DB2, load rate tables
  2. Sequential Processing: Read-process-write loop for each record
  3. Periodic Commits: Commit database changes every 500 records
  4. Error Handling: Log errors, rollback on critical failures, continue processing
  5. Finalization: Final commit, generate summary report, close resources

The program operates in one of four modes (controlled by JCL PARM):

  • POLICY: Process only new policies
  • RENEWAL: Process only renewals
  • CLAIM: Process only claims
  • ALL: Process all three file types sequentially

Data Flow at 10,000 Feet

Input File → Read Record → Validate → Business Logic → Database Operations → Output File
                               ↓                              ↓
                          Error File ← Error Handler ← Rollback (if SQL error)
                                                          ↓
                                              Commit Every 500 Records

Each record flows through validation, business rule processing, database operations, and output generation. Failed records are written to the error file while successful records generate output records. The system commits database changes periodically to enable restart capability.


Key Technical Concepts

COBOL Batch Processing

INSMASTR implements a traditional mainframe batch processing pattern:

Sequential File Processing:

  • Files are processed record-by-record from beginning to end
  • No random access or seeking
  • File status checked after every I/O operation
  • Separate error stream for failed records

Batch Execution Model:

  • Invoked via JCL (Job Control Language)
  • Runs to completion or abnormal termination
  • No user interaction during processing
  • Console messages display progress

Section-Based Organization:

  • Code organized into numbered sections (XXXX-SECTION-NAME)
  • Sections called via PERFORM statements
  • Hierarchical call structure from main control section
  • Standard naming convention: 0000=main, 1000=init, 2000-4000=processing, 9000=cleanup

DB2 Integration Patterns

The program uses embedded SQL with careful transaction management:

Embedded SQL:

EXEC SQL
    SELECT POLICY_NUMBER
    INTO :HV-POLICY-NUMBER
    FROM POLICY_TABLE
    WHERE CUSTOMER_NUMBER = :HV-CUSTOMER-NUMBER
    AND POLICY_STATUS = 'ACTIVE'
END-EXEC.

Host Variable Binding:

  • All SQL parameters use host variables (prefix HV-)
  • Host variables defined in WORKING-STORAGE SECTION
  • Two-way data flow: COBOL → SQL and SQL → COBOL
  • SQLCODE checked after every SQL statement

Connection Management:

  • Single connection established at program start
  • Connection maintained throughout execution
  • Graceful disconnect at program end
  • 30-second lock timeout to prevent deadlocks
  • Cursor Stability (CS) isolation level for optimal concurrency

UPSERT Pattern (MERGE):

EXEC SQL
    MERGE INTO CUSTOMER_TABLE CT
    USING (VALUES (:HV-CUSTOMER-NUMBER, :HV-CUSTOMER-NAME, ...))
        AS NEW_DATA (CUSTOMER_NUMBER, CUSTOMER_NAME, ...)
    ON CT.CUSTOMER_NUMBER = NEW_DATA.CUSTOMER_NUMBER
    WHEN MATCHED THEN UPDATE SET ...
    WHEN NOT MATCHED THEN INSERT ...
END-EXEC.

Transaction Management

INSMASTR implements manual transaction control with periodic commits:

Commit Strategy:

  • Commit database changes every 500 records (configurable via WS-COMMIT-FREQUENCY)
  • Final commit at program end for remaining uncommitted records
  • Commit counter incremented after each successful database operation
  • Counter reset to zero after each commit

Rollback Strategy:

  • Automatic rollback on any SQL error (SQLCODE ≠ 0)
  • Rollback counter reset to zero after rollback
  • Processing continues with next record after rollback
  • Critical errors trigger program abort with rollback

Transaction Boundaries:

  • Each input record = one logical transaction
  • Multiple SQL statements per transaction (INSERT policy, UPDATE customer, etc.)
  • Commit encompasses all database changes since last commit
  • No distributed transactions—single DB2 database only

Restart Capability:

  • Periodic commits enable recovery from failures
  • Input files can be repositioned to last successful commit
  • Processed records can be removed from input files
  • Rerun processes only unprocessed records

Error Handling Approach

INSMASTR uses a centralized error handling section (8000-ERROR-HANDLER):

Error Classification:

  • Validation Errors: Field-level validation failures (non-fatal)
  • Business Rule Errors: Policy/claim rejection based on business logic (non-fatal)
  • Database Errors: SQL failures (trigger rollback, may be fatal)
  • File Errors: I/O failures (often fatal)
  • System Errors: Resource exhaustion, abends (always fatal)

Error Processing Flow:

SET WS-ERROR-FLAG TO TRUE
MOVE error-code TO WS-ERROR-CODE
MOVE error-message TO WS-ERROR-MESSAGE
PERFORM 8000-ERROR-HANDLER

Error Handling Actions:

  • Write structured error record to ERRFILE
  • Display error message on console
  • Check SQLCODE—if SQL error, execute ROLLBACK
  • Check error severity—if CRITICAL, perform program abort
  • Otherwise, continue processing with next record

Error Record Structure:

  • Error code (numeric identifier)
  • Error message (descriptive text)
  • SQLCODE (if database-related)
  • Timestamp
  • Record context (policy number, claim number, etc.)

Processing Modes

The program supports flexible processing via JCL PARM:

ModeProcessesUse Case
POLICYPOLFILE onlyProcess new policy applications
RENEWALRENFILE onlyProcess policy renewals
CLAIMCLMFILE onlyProcess claim submissions
ALLAll three filesFull daily processing run

Mode selection controls:

  • Which files are opened
  • Which processing sections are executed
  • Which counters are updated
  • Which reports are generated

Codebase Organization

Program Structure (39 Sections)

The INSMASTR program is organized into 39 numbered sections following a consistent hierarchical structure:

PROCEDURE DIVISION (Lines 847-3229)
│
├─ 0000-MAIN-CONTROL (853-879)
│  └─ Main program flow control
│
├─ 1000-1400: Initialization (885-1133)
│  ├─ 1000-INITIALIZE-PROGRAM
│  ├─ 1100-OPEN-FILES
│  ├─ 1200-CONNECT-DB2
│  ├─ 1300-INITIALIZE-RATE-TABLES
│  └─ 1400-WRITE-REPORT-HEADERS
│
├─ 2000-2999: Policy Processing (1139-1760)
│  ├─ 2000-PROCESS-POLICIES (main loop)
│  ├─ 2100-PROCESS-POLICY-RECORD
│  ├─ 2110-VALIDATE-POLICY-INPUT
│  ├─ 2111-CALCULATE-CUSTOMER-AGE
│  ├─ 2120-CHECK-DUPLICATE-POLICY
│  ├─ 2130-CALCULATE-RISK-SCORE
│  ├─ 2140-CALCULATE-POLICY-PREMIUM
│  ├─ 2150-CREATE-UPDATE-CUSTOMER
│  ├─ 2160-INSERT-POLICY-RECORD
│  └─ 2170-WRITE-POLICY-OUTPUT
│
├─ 3000-3999: Renewal Processing (1766-2230)
│  ├─ 3000-PROCESS-RENEWALS (main loop)
│  ├─ 3100-PROCESS-RENEWAL-RECORD
│  ├─ 3110-VALIDATE-RENEWAL-INPUT
│  ├─ 3120-GET-EXISTING-POLICY
│  ├─ 3130-CALCULATE-RENEWAL-PREMIUM
│  ├─ 3140-CREATE-RENEWAL-POLICY
│  ├─ 3150-UPDATE-OLD-POLICY
│  └─ 3160-WRITE-RENEWAL-OUTPUT
│
├─ 4000-4999: Claims Processing (2197-2845)
│  ├─ 4000-PROCESS-CLAIMS (main loop)
│  ├─ 4100-PROCESS-CLAIM-RECORD
│  ├─ 4110-VALIDATE-CLAIM-INPUT
│  ├─ 4120-GET-CLAIM-POLICY
│  ├─ 4130-CHECK-DUPLICATE-CLAIM
│  ├─ 4140-FRAUD-DETECTION
│  ├─ 4150-CALCULATE-CLAIM-PAYMENT
│  ├─ 4160-INSERT-CLAIM-RECORD
│  ├─ 4170-UPDATE-POLICY-USAGE
│  └─ 4180-WRITE-CLAIM-OUTPUT
│
├─ 7000-7999: Transaction Management (2852-2867)
│  └─ 7000-COMMIT-WORK
│
├─ 8000-8999: Error Handling (2873-2941)
│  └─ 8000-ERROR-HANDLER
│
└─ 9000-9999: Finalization (2947-3229)
   ├─ 9000-FINALIZE-PROGRAM
   ├─ 9100-WRITE-SUMMARY-REPORT
   ├─ 9200-CLOSE-FILES
   ├─ 9300-DISCONNECT-DB2
   └─ 9999-ABORT-PROGRAM (emergency cleanup)

Section Numbering Scheme

The program uses a consistent 4-digit numbering scheme:

RangePurposePattern
0000-0999Main controlSingle entry point
1000-1999InitializationSetup, connection, configuration
2000-2999Policy processingNew policy creation pipeline
3000-3999Renewal processingPolicy renewal pipeline
4000-4999Claims processingClaims and fraud detection pipeline
5000-6999Reserved(Not currently used)
7000-7999Utility functionsTransaction management, commits
8000-8999Error handlingCentralized error processing
9000-9999FinalizationCleanup, reporting, termination

Sub-section Pattern:

  • Main section: X000 (e.g., 2000-PROCESS-POLICIES)
  • Primary routine: X100 (e.g., 2100-PROCESS-POLICY-RECORD)
  • Sub-routines: X110-X190 (e.g., 2110-VALIDATE, 2120-CHECK-DUPLICATE)
  • Helper routines: X111-X119 (e.g., 2111-CALCULATE-CUSTOMER-AGE)

Major Functional Areas

1. Initialization Area (Sections 1000-1400)

  • File opening with status checking
  • DB2 connection establishment
  • Rate table loading (age factors, state taxes, occupation risks, insurance type rates)
  • Report header writing

2. Policy Processing Area (Sections 2000-2999)

  • Input validation (age, coverage, SSN, email)
  • Duplicate policy detection
  • Risk score calculation (age + gender + smoking + occupation + health)
  • Premium calculation (base rate + adjustments + discounts + taxes)
  • Customer upsert (MERGE operation)
  • Policy insertion
  • Output record generation

3. Renewal Processing Area (Sections 3000-3999)

  • Renewal input validation
  • Existing policy retrieval
  • Loyalty discount calculation (1% per year, max 15%)
  • No-claims bonus calculation (2% per year, max 20%)
  • Multi-policy discount (10%)
  • Premium recalculation
  • New policy creation with incremented version
  • Old policy status update (set to 'RENEWED')
  • Renewal output generation

4. Claims Processing Area (Sections 4000-4999)

  • Claim input validation
  • Policy status verification (must be ACTIVE)
  • Duplicate claim detection
  • Fraud detection (5-factor scoring: frequency, amount, provider, pattern, timing)
  • Payment calculation (deductible, copay, coinsurance, out-of-pocket max)
  • Claim insertion with fraud score
  • Policy usage tracking update (deductible met, claims count)
  • Claim output generation

5. Transaction Management (Sections 7000-7999)

  • Periodic commit execution
  • Commit counter management
  • Error handling on commit failures

6. Error Handling (Sections 8000-8999)

  • Error classification and severity determination
  • Error record writing
  • Console message display
  • Rollback execution for SQL errors
  • Abort flag setting for critical errors

7. Finalization Area (Sections 9000-9999)

  • Final commit of uncommitted changes
  • Summary report generation (counts, statistics)
  • File closing
  • DB2 disconnection
  • Return code setting

Where to Find What

Looking ForLocationLines
Main program entry point0000-MAIN-CONTROL853-879
File definitions (FD)FILE SECTION127-200
Database host variablesWORKING-STORAGE (HV-*)300-400
Rate tablesWORKING-STORAGE (WS-*-RATE-TABLE)550-650
ConstantsWORKING-STORAGE (88-levels)220-280
Policy creation logic2000-2999 sections1139-1760
Renewal logic3000-3999 sections1766-2230
Claims logic4000-4999 sections2197-2845
Risk scoring algorithm2130-CALCULATE-RISK-SCORE~1450-1480
Premium calculation2140-CALCULATE-POLICY-PREMIUM~1485-1551
Fraud detection4140-FRAUD-DETECTION~2454-2561
Error handling8000-ERROR-HANDLER2873-2941
SQL operationsThroughout (EXEC SQL ... END-EXEC)Various
Commit logic7000-COMMIT-WORK2852-2867

Business Context for Developers

What Business Problems Does This Solve?

INSMASTR automates three critical insurance operations:

1. Policy Creation & Underwriting

  • Problem: Manual policy creation is slow and error-prone
  • Solution: Automated validation, risk assessment, and pricing
  • Value: Consistent underwriting decisions, faster policy issuance, reduced errors

2. Policy Renewal Management

  • Problem: Renewals require repricing and discount calculations
  • Solution: Automated renewal premium calculation with loyalty rewards
  • Value: Accurate renewal pricing, customer retention incentives, policy version control

3. Claims Processing with Fraud Prevention

  • Problem: Claims must be validated, fraud-checked, and paid quickly
  • Solution: Automated claims validation with multi-factor fraud detection
  • Value: Fast claim payment, fraud loss prevention, investigation prioritization

Key Business Processes (5 Major Processes)

The system implements these five interconnected business processes:

1. Policy Creation Process

  • Validates customer eligibility (age 18-85, valid SSN)
  • Prevents duplicate policies (checks existing active policies)
  • Calculates risk score (0-100 based on age, gender, smoking, occupation, health)
  • Determines premium (base rate × risk adjustments + fees - discounts + taxes)
  • Creates or updates customer record
  • Issues new policy with unique policy number

2. Policy Renewal Process

  • Retrieves existing policy details
  • Validates renewal request
  • Applies renewal type pricing (Standard +3%, Upgrade +25%, Downgrade -25%, Multi-Year -5%)
  • Calculates loyalty discounts (1% per year, max 15%)
  • Calculates no-claims bonuses (2% per year claim-free, max 20%)
  • Creates new policy version
  • Updates old policy status to 'RENEWED'

3. Claims Processing

  • Validates claim details (dates, amounts, policy coverage)
  • Verifies policy is active and covers incident date
  • Checks for duplicate claims
  • Performs fraud detection analysis
  • Calculates payment (applies deductible, copay, coinsurance, out-of-pocket max)
  • Routes for approval (auto-approve ≤$5K low fraud, manual review, or investigation)
  • Updates policy usage tracking

4. Premium Calculation Engine

  • Determines base premium (coverage amount × insurance type rate)
  • Applies age factor adjustments (higher for older policyholders)
  • Applies risk score adjustments (higher risk = higher premium)
  • Applies deductible discount (5% for higher deductibles)
  • Applies payment frequency discount (annual 5%, quarterly 2%)
  • Calculates state tax
  • Adds processing fee ($25)

5. Fraud Detection System

  • Frequency Analysis: Multiple claims in 90 days (+30 points)
  • Amount Analysis: Claims >$50K (+25 points)
  • Provider History: Provider fraud score × 0.4
  • Pattern Detection: Duplicate patterns (+20 points)
  • Timing Analysis: Weekend/holiday incidents (+10 points)
  • Scoring: < 50 = auto-process, 50-69 = review, ≥70 = investigate

Critical Business Rules to Know

Developers must understand these key business constraints:

Eligibility Rules:

  • Age range: 18-85 years (enforced at policy creation)
  • Coverage limits: $10,000 minimum, $999,999,999 maximum
  • No duplicate active policies for same customer + insurance type
  • Claims only valid for active policies

Financial Rules:

  • Auto-approval limit: $5,000 (claims ≤$5K with fraud score < 50)
  • Processing fee: $25 per new policy (NOT applied to renewals—inconsistency)
  • Deductible must be met before insurance pays
  • Out-of-pocket maximum protects customers ($10,000 typical)
  • Patient responsibility = deductible + copay

Discount Rules:

  • Maximum cumulative discounts can reach 45% (potential business issue)
  • Loyalty discount: 1% per year up to 15% cap
  • No-claims discount: 2% per claim-free year up to 20% cap
  • Multi-policy discount: 10% flat rate
  • Large coverage discount: 10% for coverage >$500K
  • Annual payment discount: 5%

Fraud Thresholds:

  • Fraud score ≥70 = Investigation required
  • Fraud score 50-69 = Manual review
  • Fraud score < 50 = May auto-approve

Why This System Exists

INSMASTR serves as the core insurance operations engine for:

  • High-volume batch processing of daily insurance transactions
  • Consistent business rule enforcement across all transactions
  • Risk-based pricing to ensure profitable underwriting
  • Fraud prevention to reduce claim losses
  • Regulatory compliance through comprehensive audit trails
  • Operational efficiency by automating manual processes

The system is critical infrastructure—it processes thousands of transactions daily and maintains the integrity of the insurance policy database.

Important Notes

Critical Things Developers Should Know

Transaction Management is Manual

Unlike modern ORMs with automatic transaction management, INSMASTR uses explicit COMMIT WORK and ROLLBACK WORK. You must understand the commit frequency (every 500 records) and ensure proper rollback on errors. Missing a commit or rollback can cause data inconsistencies.

File Status Must Be Checked

Every file I/O operation sets a file status code. The program checks these codes and handles errors appropriately. Never skip file status checking—it's critical for reliability.

SQLCODE Drives Error Handling

After every EXEC SQL statement, SQLCODE is set by DB2. A SQLCODE of 0 means success, +100 means no rows found, and negative values indicate errors. The program checks SQLCODE religiously—you must do the same when adding SQL operations.

Host Variables Bridge COBOL and SQL

All data passed between COBOL and SQL uses host variables (prefixed with HV-). Host variables must match SQL data types precisely. Mismatches cause runtime errors that are difficult to debug.

Processing Fee Inconsistency

New policies have a $25 processing fee added (line 1544), but renewals do NOT have this fee. This inconsistency is a known business rule deviation—clarify with business owners before changing.

Common Pitfalls

1. Forgetting to Increment Commit Counter

  • If you add new database operations, ensure the commit counter is incremented
  • Missing increments mean commits happen too frequently or not at all

2. Not Handling SQLCODE 100

  • SQLCODE +100 means "no rows found" and is NOT an error for SELECT statements
  • It IS an error for UPDATE statements (nothing to update)
  • Handle appropriately based on context

3. Mixing Up Section Numbers

  • Follow the numbering scheme strictly
  • Don't create sections in the wrong numeric range
  • Use proper hierarchy (X000 → X100 → X110)

4. Incorrect Host Variable Data Types

  • COBOL COMP-3 → DB2 DECIMAL
  • COBOL PIC 9(n) → DB2 INTEGER (if COMP) or DECIMAL (if COMP-3)
  • COBOL PIC X(n) → DB2 CHAR/VARCHAR
  • Mismatches cause data corruption or SQL errors

5. Not Testing All Processing Modes

  • Always test POLICY, RENEWAL, CLAIM, and ALL modes
  • File opening logic differs by mode
  • Each mode exercises different code paths

Best Practices

Code Maintenance:

  • Always include line number references in comments when referring to other sections
  • Update the maintenance history table (lines 26-31) when making changes
  • Document any business rule changes in both code comments and documentation

Database Operations:

  • Always check SQLCODE immediately after EXEC SQL
  • Use host variables for all SQL parameters
  • Include meaningful error messages that include SQLCODE value
  • Test SQL statements independently in DB2 before embedding in COBOL

Error Handling:

  • Set appropriate error codes (2xxx = validation, 3xxx = business rule, 4xxx = database, 5xxx = file I/O)
  • Populate error messages with context (policy number, customer name, etc.)
  • Determine correct severity (INFO, WARNING, ERROR, CRITICAL)
  • Log errors before returning to caller

Testing:

  • Create test input files with known good and bad records
  • Verify error records appear in ERRFILE
  • Check output records for accuracy
  • Validate database state after processing
  • Test rollback scenarios (kill program mid-processing)
  • Verify summary report statistics match input counts

Performance:

  • Be mindful of commit frequency—too frequent impacts performance, too infrequent risks losing work
  • Minimize SQL calls in loops (consider cursor operations for batch retrieval)
  • Use indexes for WHERE clause columns (see recommended indexes in database schema)
  • Monitor DB2 lock contention in production

Summary

The Insurance Management System (INSMASTR) is a robust, well-structured mainframe batch application that handles critical insurance operations. As a developer working with this system, you should:

  1. Understand the batch processing model and sequential file I/O patterns
  2. Master embedded SQL and DB2 integration techniques
  3. Follow the section numbering scheme for code organization
  4. Respect transaction boundaries and commit/rollback logic
  5. Handle errors comprehensively using the centralized error handler
  6. Know the business rules that drive the technical implementation

Start with the Technical Guide for deep technical details, refer to Data Structures for layouts, consult Business Rules for logic clarification, and use this overview as your navigation hub.

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