Lifecycle Walkthrough

A step-by-step trace through 9 transactions showing how segments evolve

This page traces a realistic policy through its full lifecycle — creation, multiple endorsements, backdated corrections, cancellation, reinstatement, and transaction deletion. Each step shows the request payload and resulting segments.

If you haven’t read the Concepts page yet, start there for an introduction to transactions, deltas, and segments.

Scenario

Insured	Greenfield Medical Center
Line	Professional Liability — Medical Facility
Term	January 1, 2025 – December 31, 2025

Delta Actions Reference

Action	Description	Matching
Overwrite	Replace a scalar or entire object	N/A — overwrites
Add	Append to a collection (set semantics)	Objects by id, primitives by equality
Remove	Remove from a collection	Objects by id, primitives by equality

Premiums and Billing

Policy financial data lives at two levels: per-segment rating and full-term billing.

Per-Segment Rating

Each segment carries its own rating data — a PolicyRatingResponse on the policy and an ExposureRatingResponse on each exposure. These typically include:

• annualPremium — the premium as if that segment’s state applied for the full policy year
• dailyProratedPremium — the daily premium rate for that segment’s risk profile

Both values are time-independent — they describe the risk characteristics of the segment, not its duration. This means two segments with identical risk produce the same rating values regardless of how many days each covers, which is what allows segment merging to work.

Full-Term Billing

fullTermPolicyBilling is a cross-segment invariant — it’s identical across every segment in a version. It contains the billing summary for the entire policy term:

"fullTermPolicyBilling": {
  "policyPremium": 85000,
  "policyTaxes": 4250,
  "policyFees": 500,
  "policyGrandTotal": 89750
}

Every endorsement should include a fullTermPolicyBilling delta with startDate/endDate spanning the full policy term (not just the endorsement effective date). This keeps the billing summary current.

fullTermPolicyBilling is not necessarily derivable from per-segment rates. Full-term billing can include flat premium minimums, surplus lines taxes, policy fees, or other adjustments that are independent of per-segment rating. The FullTermPolicyRatingResponse (a separate cross-segment field) captures these aggregate rating details.

Minimal vs Full Tracking

Callers are not required to pass per-segment field changes. You could submit endorsements that only modify fullTermPolicyBilling and leave per-segment data untouched. However, this reduces the system to importing transaction bordereau — you’d know the billing changed, but not what policy details produced the change.

Per-segment deltas capture the actual changing characteristics of the policy over time: which exposures were added, which physicians changed, when beds were decommissioned. This is the difference between a ledger of billing events and a true temporal record of the policy.

In This Walkthrough

Each transaction below includes structural per-segment deltas, per-segment PolicyRatingResponse and ExposureRatingResponse rating, and the fullTermPolicyBilling update. The segment tables include a Policy Annualized Premium column — notice that this per-segment rate typically does not match the fullTermPolicyBilling.policyPremium shown below each table.

---

Creation

Transaction 1 — NEW_BUSINESS

Effective: Jan 1 · Version: 1

Initial policy creation. One exposure (Main Campus), three named physicians.

Request

{
  "policyStartDate": "2025-01-01",
  "policyEndDate": "2025-12-31",
  "fieldModelV1Data": {
    "policy": {
      "policyStatus": "active",
      "carrier": "National Indemnity Co",
      "deductible": 25000,
      "aggregateLimit": 5000000,
      "fullTermPolicyInfo": {
        "policyStatus": "active",
        "policyStartDate": { "year": 2025, "month": 1, "day": 1, "timezone": "America/New_York" },
        "policyEndDate": { "year": 2025, "month": 12, "day": 31, "timezone": "America/New_York" },
        "primaryInsuredId": "exp-1"
      },
      "ratingResponse": {
        "annualPremium": 85000,
        "dailyProratedPremium": 233
      },
      "fullTermPolicyBilling": {
        "policyPremium": 85000,
        "policyTaxes": 4250,
        "policyFees": 500,
        "policyGrandTotal": 89750
      },
      "exposures": [{
        "id": "exp-1",
        "exposureType": "MedicalFacility",
        "facilityName": "Greenfield Main Campus",
        "bedCount": 120,
        "coveredSpecialties": ["Cardiology", "Orthopedics", "General Surgery"],
        "namedPhysicians": ["Dr. Patel", "Dr. Nguyen", "Dr. Hoffman"],
        "ratingResponse": {
          "annualPremium": 85000,
          "dailyProratedPremium": 233
        }
      }]
    }
  }
}

Segments (1):

#	Date Range	Status	Exposures	Policy Annualized Premium
1	Jan 1 – Dec 31	active	Main Campus (120 beds, 3 physicians)	85,000

fullTermPolicyBilling: Premium 85,000 · Taxes 4,250 · Fees 500 · Total 89,750

With a single full-year segment, the annualized premium matches the billing premium. This won’t last.

Endorsements

Transaction 2 — ENDORSE: Add satellite clinic

Effective: Apr 1 · Version: 2

A satellite clinic opens April 1. The new exposure is Added to the collection. The Apr–Dec segment gets updated rating reflecting the additional exposure. Jan–Mar rating is unchanged — the risk profile didn’t change, only the segment’s duration.

deltas

[
  {
    "startDate": "2025-04-01", "endDate": "2025-12-31",
    "path": "policy.exposures",
    "action": "Add",
    "value": {
      "id": "exp-2",
      "exposureType": "OutpatientClinic",
      "facilityName": "Greenfield West Clinic",
      "bedCount": 0,
      "coveredSpecialties": ["Dermatology", "Family Medicine"],
      "namedPhysicians": ["Dr. Kim"],
      "ratingResponse": {
        "annualPremium": 19000,
        "dailyProratedPremium": 52
      }
    }
  },
  {
    "startDate": "2025-04-01", "endDate": "2025-12-31",
    "path": "policy.ratingResponse",
    "action": "Overwrite",
    "value": { "annualPremium": 104000, "dailyProratedPremium": 285 }
  }
]

fullTermDeltas

[
  {
    "path": "policy.fullTermPolicyBilling",
    "action": "Overwrite",
    "value": {
      "policyPremium": 98000,
      "policyTaxes": 4900,
      "policyFees": 500,
      "policyGrandTotal": 103400
    }
  }
]

Segments (2): +1

#	Date Range	Exposures	Policy Annualized Premium
1	Jan 1 – Mar 31	Main Campus	85,000
2	Apr 1 – Dec 31	Main Campus + West Clinic	104,000

fullTermPolicyBilling: Premium 98,000 · Taxes 4,900 · Fees 500 · Total 103,400

The annualized premiums are 85,000 and 104,000 — neither matches the billing premium of 98,000. The billing total reflects the blended cost across both periods plus a flat surplus lines assessment.

Transaction 3 — ENDORSE: Add physician + specialty

Effective: Jun 1 · Version: 3

A new surgeon (Dr. Okafor) joins the main campus June 1. Neurology added as a covered specialty. Both deltas use Add on nested exposure fields. Rating updated for Jun–Dec where the risk profile changed; Apr–May is unchanged.

deltas

[
  {
    "startDate": "2025-06-01", "endDate": "2025-12-31",
    "path": "policy.exposures[exp-1].namedPhysicians",
    "action": "Add",
    "value": "Dr. Okafor"
  },
  {
    "startDate": "2025-06-01", "endDate": "2025-12-31",
    "path": "policy.exposures[exp-1].coveredSpecialties",
    "action": "Add",
    "value": "Neurology"
  },
  {
    "startDate": "2025-06-01", "endDate": "2025-12-31",
    "path": "policy.ratingResponse",
    "action": "Overwrite",
    "value": { "annualPremium": 118000, "dailyProratedPremium": 323 }
  },
  {
    "startDate": "2025-06-01", "endDate": "2025-12-31",
    "path": "policy.exposures[exp-1].ratingResponse",
    "action": "Overwrite",
    "value": { "annualPremium": 96000, "dailyProratedPremium": 263 }
  }
]

fullTermDeltas

[
  {
    "path": "policy.fullTermPolicyBilling",
    "action": "Overwrite",
    "value": {
      "policyPremium": 106000,
      "policyTaxes": 5300,
      "policyFees": 500,
      "policyGrandTotal": 111800
    }
  }
]

Segments (3): +1

#	Date Range	Physicians	Specialties	Policy Annualized Premium
1	Jan 1 – Mar 31	Patel, Nguyen, Hoffman	Cardiology, Orthopedics, Surgery	85,000
2	Apr 1 – May 31	Patel, Nguyen, Hoffman	Cardiology, Orthopedics, Surgery	104,000
3	Jun 1 – Dec 31	Patel, Nguyen, Hoffman, Okafor	Cardiology, Orthopedics, Surgery, Neurology	118,000

fullTermPolicyBilling: Premium 106,000 · Taxes 5,300 · Fees 500 · Total 111,800

The Apr–Dec segment from version 2 split at the June boundary. Three different annualized rates (85k, 104k, 118k) but a single billing premium of 106k.

Transaction 4 — ENDORSE: Remove physician, reduce beds

Effective: Jun 1 · Version: 4

Dr. Nguyen leaves the practice effective June 1. 10 beds decommissioned. Uses Remove on a primitive collection and Overwrite on a scalar.

deltas

[
  {
    "startDate": "2025-06-01", "endDate": "2025-12-31",
    "path": "policy.exposures[exp-1].namedPhysicians",
    "action": "Remove",
    "value": "Dr. Nguyen"
  },
  {
    "startDate": "2025-06-01", "endDate": "2025-12-31",
    "path": "policy.exposures[exp-1].bedCount",
    "action": "Overwrite",
    "value": 110
  },
  {
    "startDate": "2025-06-01", "endDate": "2025-12-31",
    "path": "policy.ratingResponse",
    "action": "Overwrite",
    "value": { "annualPremium": 112000, "dailyProratedPremium": 307 }
  },
  {
    "startDate": "2025-06-01", "endDate": "2025-12-31",
    "path": "policy.exposures[exp-1].ratingResponse",
    "action": "Overwrite",
    "value": { "annualPremium": 93000, "dailyProratedPremium": 255 }
  }
]

fullTermDeltas

[
  {
    "path": "policy.fullTermPolicyBilling",
    "action": "Overwrite",
    "value": {
      "policyPremium": 101000,
      "policyTaxes": 5050,
      "policyFees": 500,
      "policyGrandTotal": 106550
    }
  }
]

Segments (3): unchanged

#	Date Range	Beds	Physicians	Policy Annualized Premium
1	Jan 1 – Mar 31	120	Patel, Nguyen, Hoffman	85,000
2	Apr 1 – May 31	120	Patel, Nguyen, Hoffman	104,000
3	Jun 1 – Dec 31	110	Patel, Hoffman, Okafor	112,000

fullTermPolicyBilling: Premium 101,000 · Taxes 5,050 · Fees 500 · Total 106,550

Same segment count — the boundaries didn’t move, only the Jun–Dec data and rate changed. The annualized rate dropped from 118k to 112k reflecting fewer beds and one fewer physician.

Transaction 5 — ENDORSE: Backdate corrections to Apr 1

Effective: Apr 1 · Version: 5

Internal audit reveals the bed decommissioning actually happened in April, not June. Dr. Nguyen’s departure was also effective April 1. Dr. Okafor started in April too. Retroactive corrections applied.

deltas

[
  {
    "startDate": "2025-04-01", "endDate": "2025-12-31",
    "path": "policy.exposures[exp-1].bedCount",
    "action": "Overwrite",
    "value": 110
  },
  {
    "startDate": "2025-04-01", "endDate": "2025-12-31",
    "path": "policy.exposures[exp-1].namedPhysicians",
    "action": "Remove",
    "value": "Dr. Nguyen"
  },
  {
    "startDate": "2025-04-01", "endDate": "2025-12-31",
    "path": "policy.exposures[exp-1].namedPhysicians",
    "action": "Add",
    "value": "Dr. Okafor"
  },
  {
    "startDate": "2025-04-01", "endDate": "2025-05-31",
    "path": "policy.ratingResponse",
    "action": "Overwrite",
    "value": { "annualPremium": 108000, "dailyProratedPremium": 296 }
  },
  {
    "startDate": "2025-04-01", "endDate": "2025-05-31",
    "path": "policy.exposures[exp-1].ratingResponse",
    "action": "Overwrite",
    "value": { "annualPremium": 89000, "dailyProratedPremium": 244 }
  }
]

fullTermDeltas

[
  {
    "path": "policy.fullTermPolicyBilling",
    "action": "Overwrite",
    "value": {
      "policyPremium": 100000,
      "policyTaxes": 5000,
      "policyFees": 500,
      "policyGrandTotal": 105500
    }
  }
]

Segments (3): unchanged

#	Date Range	Beds	Physicians	Specialties	Policy Annualized Premium
1	Jan 1 – Mar 31	120	Patel, Nguyen, Hoffman	Cardiology, Orthopedics, Surgery	85,000
2	Apr 1 – May 31	110	Patel, Hoffman, Okafor	Cardiology, Orthopedics, Surgery	108,000
3	Jun 1 – Dec 31	110	Patel, Hoffman, Okafor	Cardiology, Orthopedics, Surgery, Neurology	112,000

fullTermPolicyBilling: Premium 100,000 · Taxes 5,000 · Fees 500 · Total 105,500

The structural deltas span Apr 1 – Dec 31, but the Jun–Dec segment already had beds=110, Nguyen removed, and Okafor present — no-ops there. Only Apr–May changed. Segment 2’s annualized rate is 108,000 (vs segment 3’s 112,000) because it lacks Neurology.

Setup for what’s next: Segments 2 and 3 now share the same beds, physicians, and exposures. They differ only in whether Neurology is a covered specialty — which also produces different annualized rates (108k vs 112k). One more endorsement that adds Neurology to segment 2 will converge both the structural data and the rating.

Transaction 6 — ENDORSE: Retroactive Neurology → MERGE

Effective: Apr 1 · Version: 6

Neurology coverage was contractually effective from the clinic opening date (April 1), not June 1 as originally recorded. Correction applied retroactively.

deltas

[
  {
    "startDate": "2025-04-01", "endDate": "2025-12-31",
    "path": "policy.exposures[exp-1].coveredSpecialties",
    "action": "Add",
    "value": "Neurology"
  },
  {
    "startDate": "2025-04-01", "endDate": "2025-05-31",
    "path": "policy.ratingResponse",
    "action": "Overwrite",
    "value": { "annualPremium": 112000, "dailyProratedPremium": 307 }
  },
  {
    "startDate": "2025-04-01", "endDate": "2025-05-31",
    "path": "policy.exposures[exp-1].ratingResponse",
    "action": "Overwrite",
    "value": { "annualPremium": 93000, "dailyProratedPremium": 255 }
  }
]

fullTermDeltas

[
  {
    "path": "policy.fullTermPolicyBilling",
    "action": "Overwrite",
    "value": {
      "policyPremium": 101000,
      "policyTaxes": 5050,
      "policyFees": 500,
      "policyGrandTotal": 106550
    }
  }
]

The Neurology delta adds it to Apr–May. Jun–Dec already has Neurology — no-op. The rating delta updates Apr–May’s annualized rate from 108,000 to 112,000 to match Jun–Dec.

After applying, segments 2 and 3 have identical per-segment state — same structural data, same rating. The system merges them.

Segments (2): -1

#	Date Range	Exposures	Specialties	Policy Annualized Premium
1	Jan 1 – Mar 31	Main Campus	Cardiology, Orthopedics, Surgery	85,000
2	Apr 1 – Dec 31	Main Campus + West Clinic	Cardiology, Orthopedics, Surgery, Neurology	112,000

fullTermPolicyBilling: Premium 101,000 · Taxes 5,050 · Fees 500 · Total 106,550

Key insight — endorsements can reduce segments. This is not an undo. Six separate transactions produced only 2 segments. The Apr–May / Jun–Dec boundary was erased because corrections converged both the structural data and the rating on both sides. The annualized rates are 85k and 112k — the billing premium of 101k reflects neither.

Cancellation and Reinstatement

Transaction 7 — CANCEL

Effective: Sep 1 · Version: 7

Greenfield is acquired by a hospital network with its own coverage. Policy cancelled effective September 1. The system generates the policyStatus delta internally — the caller only provides the cancellation date and updated billing.

Request

{
  "cancellationDate": "2025-09-01",
  "fullTermDeltas": [
    {
      "path": "policy.fullTermPolicyBilling",
      "value": {
        "policyPremium": 72000,
        "policyTaxes": 3600,
        "policyFees": 500,
        "policyGrandTotal": 76100
      }
    }
  ]
}

Cancel and reinstate accept only fullTermDeltas — each entry is just path and value, no startDate/endDate/action. The system handles the date ranges and status change internally.

Segments (3): +1

#	Date Range	Status	Exposures	Policy Annualized Premium
1	Jan 1 – Mar 31	active	Main Campus	85,000
2	Apr 1 – Aug 31	active	Main Campus + West Clinic	112,000
3	Sep 1 – Dec 31	cancelled	Main Campus + West Clinic	112,000

fullTermPolicyBilling: Premium 72,000 · Taxes 3,600 · Fees 500 · Total 76,100

The Apr–Dec segment split at September. The annualized rate stays 112,000 in both segments — the underlying risk profile didn’t change, only the status. But the billing dropped to 72,000 reflecting the shortened coverage period.

Transaction 8 — REINSTATE → MERGE

Effective: Sep 1 · Version: 8

The acquisition falls through. Policy reinstated at the same effective date as the cancellation. A 250 reinstatement fee is added.

Request

{
  "reinstatementDate": "2025-09-01",
  "fullTermDeltas": [
    {
      "path": "policy.fullTermPolicyBilling",
      "value": {
        "policyPremium": 101000,
        "policyTaxes": 5050,
        "policyFees": 750,
        "policyGrandTotal": 106800
      }
    }
  ]
}

Segment 3 returns to "active" — now identical per-segment state to segment 2. They merge.

Segments (2): -1

#	Date Range	Status	Exposures	Policy Annualized Premium
1	Jan 1 – Mar 31	active	Main Campus	85,000
2	Apr 1 – Dec 31	active	Main Campus + West Clinic	112,000

fullTermPolicyBilling: Premium 101,000 · Taxes 5,050 · Fees 750 (was 500) · Total 106,800

Cancel + Reinstate are invisible in the segments. Both transactions are preserved in the audit trail, but the per-segment state is identical to version 6 (pre-cancellation). Only fullTermPolicyBilling changed — the reinstatement fee increased fees from 500 to 750. This is the second type of segment reduction: reversal, where an action directly undoes a prior change’s per-segment effects.

Transaction Deletion

Transaction 9 — DELETE (undo reinstatement)

Latest version after delete: 7

The acquisition is back on. The reinstatement was premature — delete it.

Transaction deletion removes the most recent transaction (the REINSTATE) and its segments. No new version is created — version 7 (the CANCEL version) becomes current again via MAX(policy_version). The deleted transaction is archived for audit purposes.

Segments (3): +1

#	Date Range	Status	Exposures	Policy Annualized Premium
1	Jan 1 – Mar 31	active	Main Campus	85,000
2	Apr 1 – Aug 31	active	Main Campus + West Clinic	112,000
3	Sep 1 – Dec 31	cancelled	Main Campus + West Clinic	112,000

fullTermPolicyBilling: Premium 72,000 · Taxes 3,600 · Fees 500 · Total 76,100

The deleted transaction still exists in the audit trail — it’s archived, not erased. But the live policy state has reverted to the cancelled state, including the pre-reinstatement billing.

---

Summary

Segment Count Over Time

Version	Transaction	Description	Segments	Change
1	NEW_BUSINESS	Initial policy	1	—
2	ENDORSE	Add clinic	2	+1
3	ENDORSE	Add physician + specialty from Jun	3	+1
4	ENDORSE	Remove physician, reduce beds from Jun	3	—
5	ENDORSE	Backdate corrections to Apr	3	—
6	ENDORSE	Retroactive Neurology to Apr	2	-1
7	CANCEL	Cancellation from Sep	3	+1
8	REINSTATE	Reinstatement from Sep	2	-1
(7)	DELETE	Undo reinstatement — version 8 removed, version 7 becomes current	3	+1

Two Types of Segment Reduction

Convergence (Version 6)

Retroactive corrections made the Apr–May segment identical to the Jun–Dec segment — both structurally and in rating. Adjacent identical segments merged.

Segments can reduce through normal business operations — corrections, reconciliations, and backdated adjustments that happen to converge per-segment state across a boundary.

Reversal (Version 8)

Reinstatement undid the cancellation, making Sep–Dec identical to Apr–Aug. Adjacent identical segments merged.

An action that inverts a prior change can collapse the segments that action created — but the audit trail preserves both transactions.

Key Takeaways

Transactions are authored. Policy state is derived. Segments are compressed representations of per-segment state.

Segment count may increase, decrease, or stay the same with each transaction — independently of whether a change was added, corrected, or reversed. fullTermPolicyBilling and other cross-segment invariants do not affect segment boundaries at all — only per-segment data (including per-segment rating) drives merging.