Lighthouse Financial Services Company — Every stage-gate, annuity-product and regulatory term
used across this suite, defined in plain language. Methodology terms are explained fully in the
Stage-Gate Methodology Guide; this page is the quick-reference
companion for a term encountered mid-document.
Stage-Gate Methodology
Stage-GateA methodology that splits development into funded stages separated by gates — decision points where a board reviews evidence and votes to release the next stage's funding, recycle, hold, or cancel.Closest to: phase-gate structures used in aerospace qualification, but applied to funding rather than manufacturing readiness.
GateA formal decision point where a cross-functional board applies a two-tier test (must-meet, then weighted should-meet) and chooses one of five outcomes.Closest to: a BRD go-live checkpoint in the AI Transformation suite, but with a funding release and a recorded vote attached.
StageA block of funded work between two gates. Only the stage a gate has released is funded — there is no baseline for stages ahead.
Must-meetA pass/fail knockout criterion evaluated first at every gate. Any one failed removes GO and GO WITH CONDITIONS from the table regardless of the weighted score.
Should-meetA criterion scored 1–5 (plus U) and weighted; weights and criteria are fixed at the prior gate and cannot move afterward.
U (unscoreable)A should-meet rating recorded when no defensible evidence exists yet — distinct from a low score, which records disagreement about quality that does exist.
GO / GO WITH CONDITIONS / RECYCLE / HOLD / CANCELThe five defined gate outcomes. GO WITH CONDITIONS attaches binding follow-up obligations; RECYCLE reconvenes the same gate once gaps close; CANCEL ends the program and returns unspent funds.
TrancheThe dollar amount a gate releases for the stage it authorizes. Four tranches total the program's base budget.
Gate contingencyA reserve (9.0% of base on this program) held by the Board, not the Program Manager; a draw requires a gate decision.
RAIDDRisks, Assumptions, Issues, Dependencies, Decisions — one log, IDs assigned up front, rather than separate risk and issue registers opened reactively.
Gate Condition (GC)A binding obligation attached to a GO WITH CONDITIONS decision, with a named owner, a due date before the next gate, and a verification method recorded at issue, not renegotiated at closure.
Post-closure efficacyThe standing question this suite asks of every closed Gate Condition: did closing it actually change the underlying position, or only produce evidence?
Annuity Product
FIAFixed Indexed AnnuityA deferred annuity crediting interest linked to an index's performance, with a guaranteed floor (often 0%) protecting against loss of principal from market declines.
RILARegistered Index-Linked AnnuityAn indexed annuity that can pass through some downside, structured as a registered security — which brings SEC and FINRA oversight into scope. This program is deliberately not a RILA (Decision D-01).
GLWBGuaranteed Lifetime Withdrawal BenefitAn optional rider guaranteeing a minimum lifetime withdrawal amount regardless of how the underlying account value performs.
Crediting strategyThe method by which interest is credited to the contract — e.g. a fixed account, or a point-to-point strategy tracking an index with a cap.
Cap rateThe maximum interest rate an indexed crediting strategy can earn in a period, regardless of how far the index rises.
Point-to-pointAn indexed crediting method comparing the index value at two points in time (e.g. the start and end of a one-year term) to determine credited interest.
Surrender chargeA declining-schedule penalty for withdrawing more than a contract's free amount during an initial period — seven years on this product.
Free-look periodA window after issue during which a policyholder may cancel the contract for a full refund with no surrender charge.
PersistencyThe rate at which policyholders keep a contract in force rather than surrendering or lapsing it — a key assumption behind the pricing and reserve basis.
Rider election rateThe share of policyholders who choose to add an optional rider (here, the GLWB) to their base contract.
Regulatory
IIPRC / the CompactInterstate Insurance Product Regulation CommissionA multi-state commission offering single-point filing against uniform product standards, used for the Compact-member states.Closest to: a shared, pre-agreed standard similar to how federal ATO reciprocity avoids re-authorizing a system state by state.
SERFFSystem for Electronic Rate and Form FilingThe NAIC's electronic filing system, used for states not covered by the Compact.
NAICNational Association of Insurance CommissionersThe standard-setting body for US state insurance regulation; publishes model regulations states may adopt.
Model Regulation #275The NAIC's Suitability in Annuity Transactions model — the best-interest standard driving advisor training, disclosure and the Distribution & Advisor Enablement Plan.
Non-Compact stateA state that has not adopted IIPRC standards and requires its own filing — California and Florida on this program, filed separately through SERFF.
Contract formThe legal policy document filed with regulators and issued to policyholders; must be approved before the product can be sold in a given state.
ISDA / CSAInternational Swaps and Derivatives Association / Credit Support AnnexThe standard master agreement and collateral terms governing a derivatives relationship with a hedging counterparty.
Statutory reserveThe reserve an insurer must hold under state statutory accounting rules, distinct from GAAP reserves — drives the capital strain behind the IRR calculation.
Governance
Gate Review BoardThe six-seat, five-vote cross-functional executive body that decides every gate outcome for this program.
ChairThe NPD Program Manager, who facilitates gates, certifies evidence quality, and does not vote (Decision D-11).
QuorumThe minimum voting attendance required for a gate decision to carry, set out in the Governance Model.
DissentA formal record of a Board member's disagreement with the majority gate outcome, carried in the gate package rather than omitted.
Working poolThe 84 program staff who carry WBS assignments, distinct from the 6-seat Gate Review Board, which is oversight only.
Blended rateA team's total cost divided by its total hours — used for planning-level comparison, not as an individual billing rate.
Product Economics
Vocabulary introduced by the cash-flow
model behind the Cost-Benefit Analysis. These are the terms
a reader needs to follow why a 30% volume shortfall changes the return at all.
Required capitalStatutory capital an insurer must hold against an in-force block. In this program's model it is 4.2% of account value, and 4.2% of the Year 1 premium is exactly the Year 1 strain locked in the business case.
Account valueAVThe policyholder's accumulated balance. Nearly every economic quantity in the model scales off it: margin is earned on it, and required capital is held against it.
Net product marginGross investment spread less maintenance expense and the cost of hedging the guarantee. Solves to ~0.93% of account value here — inside the 0.8–1.3% band typical of an FIA carrying a GLWB rider.
Operating leverageThe reason a downside case differs from the base case at all. Margin and required capital both scale with sales volume; fixed run cost does not. Without fixed cost a proportional model is scale-invariant and 30% lower volumes would leave the return unchanged.Closest to: the fixed-cost absorption problem in any manufacturing program — the aerospace suite's per-ship-set economics are the same idea from the other direction.
Cohort modelA projection that follows one defined block of business (here the five locked sales years) from issue to run-off, rather than modeling a company in perpetuity.
Run-offThe period after new sales stop, during which the in-force block lapses away and the capital held against it is released back.
Capital releaseCapital returning to the carrier as the block runs off. It is what turns cumulative cash flow positive, and it is why payback lands in Year 9 rather than early.
Reproduce-or-abortThe contract this suite's model runs under: it recomputes every locked return figure on import and raises rather than loading if any one fails to reproduce. There is no configuration in which a published return cannot be derived.
Pairs that get confused, and why it matters here
Each of these is a distinction this
suite depends on. Collapsing any one of them changes what a document means.
| Not the same thing | The distinction |
|---|
| Program cost vs capital strain | Program cost builds, files and launches the product and is spent once. Capital strain is statutory capital the product ties up as it sells, and it is returned as the block runs off. They are different money, on different clocks, answering different questions. Summing them is the most common misreading of this business case. |
| RECYCLE vs HOLD vs CANCEL | Recycle: the gate reconvenes once specific, named gaps close — the program is alive and the fault is internal. Hold: paused for a cause outside the program's control. Cancel: it ends. Only recycle carries an obligation to come back. |
| A low score vs a U | A low score records disagreement about evidence that exists. A U records that no defensible evidence exists yet. Gate 1 was not scored low — two criteria were never scored at all, which is what produced the recycle. |
| Must-meet vs should-meet | Must-meet is a pass/fail knockout evaluated first; any one failed removes GO from the table regardless of the weighted score. Should-meet is scored and weighted. A strong score cannot rescue a failed must-meet. |
| Condition closed vs risk resolved | GC-04 was correctly specified, verified and closed on time — and left $17,000,000 of Year 1 premium uncommitted. A condition closes when its stated verification method is satisfied, which is not the same as the underlying weakness going away. Every closed condition in this suite therefore carries an efficacy finding. |
| Released vs authorized funding | The Board authorized a ceiling for the whole program at Gate 1. It has released two of four tranches. Unreleased money is not committed, not baselined, and not available — which is why no full-program earned value baseline is published. |
Terms this suite deliberately does not use
A glossary that only defines what a
document says is half a glossary. These are standard program-management terms a reader might expect
to find here and will not, each for a reason recorded in the methodology.
Earned Value ManagementEVMNot used. Only two of four stages are funded at any time, so a program-level cost or schedule variance would measure actuals against a budget nobody has approved. Performance is reported within the released tranche only (Decision D-10).
Change Control LogNot used. A material change is a gate re-submission — the mechanism that produced the Gate 1 recycle. In-stage change is absorbed inside the released tranche and reported at the next gate. A change log implies a baseline worth protecting; this program's baseline is the gate itself.
Business Requirements DocumentBRDNot used. The Gate 1 Business Case Package carries the justification and the Product Requirements Document carries the requirements. A BRD would sit between them duplicating both.
Closeout Report / Lessons LearnedNot carried as live artifacts. The program is mid-flight at the status date. The Gate 5 Post-Launch Review carries the end-state view instead, explicitly labeled illustrative and deliberately not reconciled against the live documents.
Sprint, velocity, burndownNot used. This is not an agile delivery program. The Agile suite in this portfolio covers that vocabulary.
KillNot used as an outcome label. The framework literature uses a blunter one-syllable word where this program says CANCEL. The decision is identical in authority and effect; the plainer label is used because these documents circulate to distribution partners and external reviewers.
Maintained by C. Tyrrell, NPD Program
Manager and Chair of the Gate Review Board. Related:
Stage-Gate Methodology Guide ·
Stage-Gate Governance Model ·
Gate Decision Framework ·
Cost-Benefit Analysis.