Solveda developed a sophisticated Investment System (NIS) for a major mid-west insurance company. The application was deployed after a multi-year, multi-million dollar effort.
The project development effort has followed a strict methodology to ensure that detailed requirements are discussed, documented and approved by
the user community. Each of the almost 300 key documents focus on specific functionality (Stock Split, Cash Reconciliation, Effective Dating etc.).
After initial and final user and Solveda reviews the feature is passed to the development team for construction. After construction and
unit-testing the feature is included in internal Solveda builds for Solveda QA. Upon completion the feature will then be included in a build and
made available to the client for QA and UAT tasks.
In A Nutshell
Manage all security based investments; accept trades and other transactions (Capital Changes, Pay-Downs etc), process according to
Accounting Method rules (GAAP, SAP and TAX); manage a sub-ledger for each Accounting Method and feed data into various packages to produce Financial Statements and
TAX Returns for a holding corporation with more than 100 subsidiary companies.
Complete replacement of a "green screen" legacy application
NIS completely replaces the existing legacy application. The legacy application has been developed over the last 20 years and is seriously
limited in terms of essential functionality and the ability to extend existing features.
A major challenge was to collect and balance requirements and priorities from various user departments including Trading, Finance
(for GAAP accounting), Accounting (for Statutory accounting) and TAX.
All Security investments are "profiled" - this provides the ability to accommodate different security types (stocks, fixed maturities, options,
mortgage-backed, asset-backed, sinking-fund, call/put and many others) without restricting the users in the event that data was entered incorrectly,
the attributes change over time or a new investment instrument is introduced. Flexibility extends to how the securities are reported, on an
Accounting Method basis. For example, the Finance and TAX departments have different rules for categorizing short and long term holdings.
NIS will process all market driven events. This includes simple Stock events such as splits, mergers, exchanges, conversions etc.; complex fixed bond
related events such as factor-based pay-downs, scheduled and unscheduled payments etc. and complex inter-company trading events that accommodate
deferral processing. In sum, NIS supports more than 90 complex events.
The application has a ledger based accounting module. This integrates directly with the Chart of Accounts and is supported for each of the
The processing rules are XML based to provide flexibility when industry standards are updated. Event processing is mapped to financial components
(book values, revenue, income). Additional mapping allows for user managed generation of ledger entries.
The Effective Module is integrated throughout the application. Event processing, processing rules, maintenance tables, ledger entries are all
effective dated. This module supports concepts such as back-dated entry and replay processing. Consider the following example:
- Day 1: 100 shares are purchased
- Day 10: stock is split on a ratio of 2:1 (shares owned now 200)
- Day 20: all 200 shares are sold
- Day 21: Split should have been entered as a ratio of 3:1; event on Day 10 is corrected and system "replays" all subsequent events, ultimately selling 300 shares.
The application interfaces with many external applications
Bloomberg:acceptance of new securities and all trades. Additionally Bloomberg is used to "pull" the latest cash-flows for amortizing securities, call/put,
sinking fund and other schedules. Inventory reconciliation takes place by providing a NIS feed of known inventory for reconciliation with the
holdings monitored in Bloomberg.
Annual Statements: the application will provide a Quarterly and Annual feed for the generation of the consolidated Annual Statements.
- Tax Returns:
feeds into CorpTAX are provided for the final preparation of the more than 100 TAX Returns, for both the various holding corporations and
- General Ledger:
feeds into the PeopleSoft and Sunguard GL packages are provided.
- BONY (Bank Of New York):
feeds are accepted from BONY for Cash Reconciliation.
Yield and Amortization Computation
This complex module is responsible for computing current Yields and Amortization schedules for all amortizing securities.
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