[lmi] Release notes for lmi-20100923T0020Z

[Wendy Boutin]

For contracts that pass premium tax through as a premium load,
it's important to identify the state whose tax rate applies. In
the past, lmi assumed that whatever state exercises jurisdiction
over a policy also receives this tax, but that's not necessarily
the case. Now, state input has been separated into two fields:
 - premium-tax state, which affects only passed-through tax; and
 - state of jurisdiction, which governs everything else.
For inforce illustrations, the intention is eventually to pass
both these fields in an extract. For new business, specifying
both states lets you illustrate a case exactly the way you want
it to be issued.

For products that don't pass the tax through, the premium-tax
state field can be ignored. In fact, it's omitted from the GUI
used to illustrate such products in the field.

Formerly, both jurisdiction and premium tax were controlled by
the corporation state for some products, and the insured state
for others. Those old fields are still present in case it is
someday desired to print addresses, but they no longer have any
effect on illustrated values.

In theory at least, it would seem possible to duplicate the way
each admin system determines the premium-tax state. But official
guidance [1] leaves room for interpretation, and actual practice
may vary by market, admin system, and policy. Premium tax may
depend on where the contract was written. Or it may follow the
state of residence or employment--either the state with the
largest number of insureds, or each individual's state, depending
on group size. Several new input fields would be needed, such as:
 - billing address
 - number of lives in a case as of its inception
 - whether coverage is mandatory or supplemental
 - whether a group certificate is "portable"
and probably a few others. But exceptions will no doubt be made,
so the two state fields added in this release would still be
necessary to support overrides. Explicitly specifying both states
is the simplest approach, and the only sure way to match admin.

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[1] "official guidance"--see especially page 30 here:

http://www.naic.org/documents/frs_summit_presentations_03.pdf