Scenarios
The premium processing with apply registrations has the following three steps, and these steps are executed in a repetitive manner:
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Calculate premium
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Forward and Catch up Billing
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Always calculates premium for a policy from the policy calculation period that starts after the Date Paid To and have the calculation date on or before the calculation input date
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Process Registrations
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Determines the Date paid to for payments that received on time and are exact.
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Create mutation for a late and non-accurate payment
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Apply Payments to Periods
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This functionality makes it possible to apply payment registrations and determine the coverage period that can be considered to be paid for. The retroactive changes on policy, late or early payments, etc. have an effect on the premium that is calculated by the system for a given period. The money that is paid may no longer be enough to cover the full period because of these changes and therefore the coverage period must be re-established by re-calculating it. This process re-calculates the periods taking into the effect of the time the payment is made and the amount for which it is made. At the end of the activity the Date Paid To - that is the period up to which the coverage is paid for is determined. Any policy calculation periods beyond this date are deleted and the results are reversed.
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The reversed periods are recalculated in the calculate premium process and new calculation results are produced.
Scenarios
The following scenarios are described in detail
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Scenario 1: Late and Insufficient Payment
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Scenario 2: Excess Payment
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Scenario 3: Carry over and New Payments
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Scenario 4: Refunds
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Scenario 5: Unsolicited Payments
Configuration
For all the below-mentioned scenarios, the following configuration is considered
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Collection Setting - Weekly policy calculation periods with advance setting biweekly, span reference 2018-01-01, the calculation date offset is -2 days and the pay date offset is -1 day.
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Collection setting start date 2017/12/30.
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Policy enrollment product start date - 2018-01-05
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Premium - value reference date set to paydate
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April 2018 - March 2019: $15 per week
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April 2019 - March 2020 - $17 per week
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Day 0
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Date Paid To - not set
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The premium calculation process starts with the calculation input date of 2017/12/30.
Suppose, no policy calculation periods are generated using Generate policy calculation period, then as first step system will generate the following PCPs by invoking the process generate policy calculation periods with the generate up to date 2017/12/30. The system will generate periods while the calculation date is less than or equal to the generate up to date.
Start Date | End Date | Calculation Date | Pay Date | Reference Date |
---|---|---|---|---|
2018-01-01 |
2018-01-07- |
2017/12/30 |
2017/12/31 |
2018-01-05 |
2018-01-08 |
2018-01-14 |
2017/12/30 |
2017/12/31 |
2018-01-05 |
Split logic is implemented to split periods on the start and end dates of the enrollment
Start Date | End Date | Calculation Date | Pay Date | Reference Date |
---|---|---|---|---|
2018-01-01 |
2018-01-04 |
2017/12/30 |
2017/12/31 |
2018-01-05 |
2018-01-05 |
2018-01-07 |
2017/12/30 |
2017/12/31 |
2018-01-05 |
2018-01-08 |
2018-01-14 |
2017/12/30 |
2017/12/31 |
2018-01-05 |
As a next step system calculates premium for the policy calculation period starting on 05/01 and 08/01 as the enrollment is valid from 05/01.
PCP | Expected Pay date | Premium |
---|---|---|
05/01 |
2017/12/31 |
$6.43 |
08/01 |
2017/12/31 |
$15 |
Scenario 1: Late and Insufficient Payment
In this case the customer is expected to pay 21.43 on 2017/12/31, customer instead pays $20 on 01/01. System receives a new registration with a pay date of 01/01
- Process Registrations
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This process selects PCP starting on 05/01 as the starting point to apply registration. In the next step it also selects PCP starting on 08/01 as it has the same pay date of 31/12 (as the PCP starting on 05/01). The totals of the results of both the PCPs are added. The process attempts to find a registration with a pay date of 31/12. In this case, there is a new registration but none as of 31/12, therefore system creates a mutation with an effective date of 01/01 (the effective date is set to the start date of the selected policy calculation period or to the pay date of the earliest new payment, whichever is earlier).
- Apply Payments to Period
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This process for the policy will start with a look back date set to 01/01.
The system will re-generate periods (generate up to 01/01, look back 01/01). The PCP 05/01 and 08/01 are in the selection after to verify periods step.
The process selects PCP 05/01 and attempts to apply registration with a pay date of 01/01. As a first step, the pay date on the PCP is updated to 01/01 and the PCP is re-calculated. Assuming nothing else has changed in the system, the result of the calculation remains the same as the value reference date is still in FY 2019. The total on the registration is more than the total on the results for 05/01. The process then selects the next PCP 08/01. The pay date is updated to 01/01 and premium is (re)calculated. The total on the registration becomes less than the total result of both the PCPs together. At this point, the process knows that the money received is enough to cover PCP starting on 05/01, but is not enough to cover PCP starting on 08/01.
The process then calculates the money available to apply to the PCP starting on 08/01. This is $13.57 ( $20 ( amount on the registration) - $6.43 ( total for PCP starting on 05/01)).
The next step is to determine how far $13.57 can be applied. To determine this per day premium for the PCP 08/01 is calculated. The balance amount of $13.57 is divided by this per day rate to get the total number of days to which the registration can be applied. This gives 6 days of coverage that can be bought by $13.57. The PCP starting on 08/01 is split as shown below.
Start Date | End Date | Calculation Date | Pay Date |
---|---|---|---|
2018-01-08 |
2018-01-13 |
2017/12/30 |
2018-01-01 |
2018-01-14 |
2018-01-14 |
2017/12/30 |
2018-01-01 |
The process re-calculates the premium for the PCP starting on 08/01, the sum of the amount on PCP’s and registration still do not match, in this case the amount on registration is more than the sum of PCP by $0.71.
At this point system marks the registrations from 01/01 as applied, creates carryover transaction of $0.71 as 'New' and a negative carryover offset -$0.71 as 'Applied'. The pay date on the carryover and the offsets is set to the pay date of the registration.
It also updates the Date Paid To '13/01' and persists the final results for the period 05/01 and 08/01. Note that the interim results for the period 08/01 (with an end date 14/01) are discarded.
Since there is no new registration to apply, the PCP stating on14/01 is deleted.
- Calculate Premium
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If the premium is calculated for this policy with calculation input date of 01/01, the look back date gets set to 14/01 (as this is the Date Paid To plus one).
The following PCP gets generated and premium for it is not calculated as the calculation date is after the calculation input date:
Start Date | End Date | Calculation Date | Pay Date |
---|---|---|---|
2018-01-14 |
2018-01-14 |
Since the activity indicates that the catch up periods should be part of the next billing cycle, system would set the calculation date to 13/01, so that this PCP is calculated in the next forward billing cycle. Catch up PCP - The PCPs that is not paid in full on time. |
Since the activity indicates that the catch up periods should be part of the next billing run, system would set the pay date to 12/01, that is, the pay date of the next billing cycle |
- Other Details
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System date - 30/12
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Process registrations
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No new registrations are received for this policy, so the policy is not picked up for processing
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Apply Registrations to Periods
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The process identifies no new registrations to apply and therefore the policy is not further processed
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System date - 31/12
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Calculate premium activity is started with calculation input date 31/12
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The date paid to is not set yet, so the look back is set to earliest enrollment date 05/01
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Periods 05/01 and 08/01 are selected. If there is no mutation that takes effect before the end dates of these periods, they are not re-calculated.
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Scenario 2: Excess Payment
In scenario 1 the payment is late and short. Instead of this, suppose if the payment is late and is more that expected.
Suppose if the payment is of $60 on 01/01 then the process will work as follows:
- Process Registrations
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This process results in a similar outcome as in the previous scenario (1), a mutation will be created with the effective date of 01/01as the sum of payments expected is more than the actual payment received.
- Apply Payments to Period
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For the policy under consideration, this process starts with a look back date set to 01/01.
The system re-generates periods (with the generate up to 01/01, look back 01/01) and after the verify periods step, PCP 05/01 and 08/01 remain in the selection.
The process selects PCP 05/01 and attempts to apply registration with the pay date of 01/01. As the first step, the pay date on the PCP is updated to 01/01 and the PCP is re-calculated (assuming nothing else has changed in the system, the result of the calculation remains the same (as the value reference date is still in FY 2019)). The total on the registration is more than the result for 05/01 and therefore the process then selects the next PCP 08/01 updates the pay date and calculates the premium for it. The total on the registration is still more than the total of both the PCPs together. At this point, the process knows that the money received is more than what is needed to cover both the PCPs.
The process generates the next PCPs (generate up to date set to end date of the last PCP+1, that is, 15/01, look back 15/01). The following PCPs get generated (assuming nothing is updated in the dynamic logic)
Start Date | End Date | Calculation Date | Pay Date |
---|---|---|---|
2018-01-15 |
2018-01-21 |
2018-01-13 |
2018-01-14 |
2018-01-22 |
2018-01-28 |
2018-01-13 |
2018-01-14 |
The PCPs starting 15/01 is calculated with the pay date of 01/01. The premium for all the PCPs together (starting on 05/01, 08/01 and 15/01) ($45) is still insufficient compared to the registration ($60). Therefore the process calculates premium for the PCP starting on 22nd. The total premium now matches the registrations amount. The registration is marked applied, the Date Paid To is moved to 28/01, and the calculation results for PCP 05/01, 08/01, 15/01 and 22/01 are persisted and financials created.
Note - In case if the registration was $50 instead of $60 then the PCP starting on 22/01 would get split (similar to short pay scenario 1).
- Calculate Premium
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If the premium is calculated for this policy with an calculation input date of 01/01. The look back date gets set to 28/01 (as this is the Date Paid To) and no new periods are get generated.
If there are no new mutation, nothing get (re)calculated for the policy. If there is a mutation with an effective date on or before 28/01, the system will raise an error as payments must be re-applied.
The above is true for all the premium runs up to the calculation input date 26/01 (assuming no mutation and no new registration). Premium calculation process with calculation input date of 27/01, generates the following PCPs and premium for it gets calculated
Start Date | End Date | Calculation Date | Pay Date |
---|---|---|---|
2018-01-29 |
2018-02-04 |
2018-01-27 |
2018-01-28 |
2018-02-05 |
2018-02-11 |
2018-01-27 |
2018-01-28 |
Scenario 3: Carry Over and New Payments
In scenario 1, the apply payments process ends with the following records in the registration entity
Description | Pay Date | Amount | Status |
---|---|---|---|
Payment |
2018-01-01 |
$20 |
Applied |
CARRYOVER_OFFSET |
2018-01-01 |
-0.71 |
Applied |
CARRYOVER |
2018-01-01 |
0.71 |
New |
Suppose the calculate premium results in PCP starting on 14/01 with a pay date of 02/01 and a premium of $2.14 (via Run calculation and produce invoice operation).
If the system receives registration of $1.43 with a pay date of 02/01 then it will be applied as described below
- Process Registrations
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The process selects the PCP 14/01 (after the Date Paid To). The total unapplied payment on 02/01 is $2.14 ( the sum of unapplied carryover $0.71 and the unapplied payment $1.43). This is an exact match to the expected payment for the PCP 14/01. The date paid to is moved to 14/01. The carryover and the payment are marked as applied. The applied pay date on the offset is set to 2018-01-02.
Description | Pay Date | Amount | Status | Applied Pay Date |
---|---|---|---|---|
PAYMENT |
2018-01-01 |
$20 |
Applied |
|
CARRYOVER_OFFSET |
2018-01-01 |
$-0.71 |
Applied |
|
CARRYOVER |
2018-01-01 |
$0.71 |
Applied |
2018-01-02 |
PAYMENT |
2018-01-02 |
$1.43 |
Applied |
Scenario 4: Refunds
Suppose for the policy under consideration, the premium is calculated and paid (on time) until March 2018. A refund registration of $50 is received on 1st April 2018.
Policy Calculation Periods
Start Date | End Date | Calculation Date | Pay Date | Premium |
---|---|---|---|---|
2018-01-01 |
2018-01-07 |
2017-12-30 |
2017-12-31 |
$15.00 |
2018-01-08 |
2018-01-14 |
2017-12-30 |
2017-12-31 |
$15.00 |
2018-01-15 |
2018-01-21 |
2018-01-13 |
2018-01-14 |
$15.00 |
2018-01-22 |
2018-01-28 |
2018-01-13 |
2018-01-14 |
$15.00 |
2018-01-29 |
2018-02-04 |
2018-01-27 |
2018-01-28 |
$15.00 |
2018-02-05 |
2018-02-11 |
2018-01-27 |
2018-01-28 |
$15.00 |
2018-02-12 |
2018-02-18 |
2018-02-10 |
2018-02-11 |
$15.00 |
2018-02-19 |
2018-02-25 |
2018-02-10 |
2018-02-11 |
$15.00 |
2018-02-26 |
2018-03-04 |
2018-02-04 |
2018-02-25 |
$15.00 |
2018-03-05 |
2018-03-11 |
2018-02-24 |
2018-02-25 |
$15.00 |
2018-03-12 |
2018-03-18 |
2018-03-10 |
2018-03-11 |
$15.00 |
2018-03-19 |
2018-03-25 |
2018-03-10 |
2018-03-11 |
$15.00 |
2018-03-26 |
2018-03-31 (assuming PCP is split on FY ending) |
2018-03-24 |
2018-03-25 |
$12.86 |
The following registrations are already applied:
Description | Pay Date | Premium |
---|---|---|
Payment |
2017-12-31 |
$30.00 |
Payment |
2018-01-14 |
$30.00 |
Payment |
2018-01-28 |
$30.00 |
Payment |
2018-02-11 |
$30.00 |
Payment |
2018-02-25 |
$30.00 |
Payment |
2018-03-11 |
$30.00 |
Payment |
2018-03-25 |
$12.86 |
- Process Registrations
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The refund of $50 gets applied to the payments of 25th Feb,11th March, 25th March. The process creates mutation with an effective date of 26th Feb.
Registrations after the refund is applied
Description | Pay Date | Premium |
---|---|---|
Payment |
2017-12-31 |
$30.00 |
Payment |
2018-01-14 |
$30.00 |
Payment |
2018-01-28 |
$30.00 |
Payment |
2018-02-11 |
$30.00 |
Payment |
2018-02-25 |
$30.00 |
REFUND_OFFSET |
2018-02-25 |
-$7.14 |
Payment |
2018-03-11 |
$30.00 |
REFUND_OFFSET |
2018-03-11 |
-$30 |
Payment |
2018-03-25 |
$12.86 |
REFUND_OFFSET |
2018-03-25 |
-$12.86 |
Refund |
2018-04-01 |
-$50.00 |
REFUND_OFFSET |
2018-04-01 |
$50.00 |
- Apply Registrations
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Apply registrations starts with the look back date of 26th Feb. The process selects the PCP starting on 26th Feb as the look back date takes effect in this period. The pay date on this period gives the point in time from which the registrations must be re-applied. All the registrations with pay date on or after 25th Feb are marked as ‘New’.
Registrations
Description | Pay Date | Premium | Status |
---|---|---|---|
Payment |
2017-12-31 |
$30.00 |
Applied |
Payment |
2018-01-14 |
$30.00 |
Applied |
Payment |
2018-01-28 |
$30.00 |
Applied |
Payment |
2018-02-11 |
$30.00 |
Applied |
Payment |
2018-02-25 |
$30.00 |
New |
REFUND_OFFSET |
2018-02-25 |
-$7.14 |
Applied |
Payment |
2018-03-11 |
$30.00 |
New |
REFUND_OFFSET |
2018-03-11 |
-$30 |
Applied |
Payment |
2018-03-25 |
$12.86 |
New |
REFUND_OFFSET |
2018-03-25 |
-$12.86 |
Applied |
Refund |
2018-04-01 |
-$50.00 |
Applied |
REFUND_OFFSET |
2018-04-01 |
$50.00 |
Applied |
In the next step, the process replaces PCPs starting from 26th Feb up to the Date paid to.
The following PCPs are re-generated
Start Date | End Date | Calculation Date | Pay Date |
---|---|---|---|
2018-02-26 |
2018-03-04 |
2018-02-24 |
2018-02-25 |
2018-03-05 |
2018-03-11 |
2018-02-24 |
2018-02-25 |
2018-03-12 |
2018-03-18 |
2018-03-10 |
2018-03-11 |
2018-03-19 |
2018-03-25 |
2018-03-10 |
2018-03-11 |
2018-03-26 |
2018-03-31 |
2018-03-24 |
2018-03-25 |
2018-04-01 |
2018-04-01 |
2018-03-24 |
2018-03-25 |
New registrations (going forward) are then applied to the PCPs (staring with the earliest).
- PCP starting 26th Feb, 5th March
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The pay date on the PCP is updated to the earliest registration pay date, that is 25thFeb and the premium for it is calculated ($15.00). The total registration amount for 25th Feb is $22.86 ( $30 + (-7.14)). Registration total is more than the premium and therefore the next PCP (5th March) is selected and (re)calculated. The total premium amount is still more than the total registration amount so the process must determine the coverage period to which $22.86 can be applied.
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Available registration amount to apply to PCP stating 5th march is $7.86 ( 22.86 -15.00)
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Amount needed to buy one day of coverage is $2.142857 (15.00/7)
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$7.86 can buy 3 days ( integral value of 7.86/2.142857)
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PCP starting 5th March is split
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5th March – 7th March
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8th March -11th March
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-
PCP starting 5th March is recalculated
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Carry over is calculated by subtracting the calculation results from the available registration amount
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Carry over of $1.43 is created with the pay date of 25th Feb
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Carry over offset of -$1.43 is created
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Date paid to is moved to 7th March
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Registrations are marked as applied.
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- PCP starting 8th March
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The registrations having the pay date 11-03 are picked up next. The total registration amount on this pay date plus the carry over is not enough to move the date paid to and therefore cannot be applied to buy any coverage. The date paid to is not updated. The process moves to the next new registration. The registration with the pay date 25th Mar are selected. Here too the total of the registrations and carry over is not enough to buy any coverage and the date paid to is not updated.
There are no more new registrations to apply and therefore all the period starting from 8th March are deleted.
Existing non reversed calculation results that have start date after 7th March (Date Paid To) are reversed and marked for financial reversal.
Registrations
Description | Pay Date | Premium | Status | Applied Pay Date |
---|---|---|---|---|
Payment |
2017-12-31 |
$30.00 |
Applied |
|
Payment |
2018-01-14 |
$30.00 |
Applied |
|
Payment |
2018-01-28 |
$30.00 |
Applied |
|
Payment |
2018-02-11 |
$30.00 |
Applied |
|
Payment |
2018-02-25 |
$30.00 |
Applied |
|
REFUND_OFFSET |
2018-02-25 |
$7.14 |
Applied |
|
CARRYOVER |
2018-02-25 |
$1.43 |
Applied |
2018-03-11 |
CARRYOVER_OFFSET |
2018-02-25 |
-$1.43 |
Applied |
|
Payment |
2018-03-11 |
$30.00 |
Applied |
|
REFUND_OFFSET |
2018-03-11 |
-$30 |
Applied |
|
CARRYOVER |
2018-03-11 |
$1.43 |
Applied |
2018-03-25 |
CARRYOVER_OFFSET |
2018-03-11 |
-$1.43 |
Applied |
|
Payment |
2018-03-25 |
$12.86 |
Applied |
|
REFUND_OFFSET |
2018-03-25 |
-$12.86 |
Applied |
|
|
|
|
|
|
CARRYOVER_OFFSET |
2018-03-25 |
-$1.43 |
Applied |
|
Refund |
2018-04-01 |
-$50.00 |
Applied |
|
REFUND_OFFSET |
2018-04-01 |
$50.00 |
Applied |
PCPs and Calculation Results
Start Date | Premium | Financials |
---|---|---|
2018-02-26 |
Calculation Result V1 $15.00 |
V1 $15.00 |
2018-03-05 |
Calculation Result V1 $15.00 |
V1 $15.00 |
2018-03-12 |
Calculation Result V1 $15.00 is reversed |
V1 $15.00 |
2018-03-19 |
Calculation Result V1 $15.00 is reversed |
V1 $15.00 |
2018-03-26 |
Calculation Result V1 $15.00 is reversed |
V1 $15.00 |
Note - If there is payment registration as of 02/04, the process will apply this payment to policy calculation periods starting 8th Mar, premium for PCP 8th Mar is calculated with the pay date of 02/04 and a higher premium gets applied.
Scenario 5: Unsolicited Payments
Suppose for the policy under consideration, the premium is calculated and paid (on time) until March 2019. A new registration of $92.14 is received on 2nd April2019. In this scenario lets suppose premium is not calculated beyond march 31st. Also, suppose policy calculation periods are not generated and there is no existing mutation.
- Payment Registration
-
This process will not create any mutation and payment registration will remain in the status 'New'.
- Apply Registration to Periods
-
This process starts by setting the look back date from which the payments must be applied to the periods. In this case there is no mutation on the policy , but there is one new payments to apply. The look back date gets set to 1st April (earliest of Date Paid To plus one and pay date of the registration). The payment is to be applied for a period after the Date Paid To.
Since there is no policy calculation period to which the registration can be applied. System will generate the next period after 31st Mar, update the pay date to the pay date of the registration being applied and will keep calculating till the registration amount can be applied.
Periods and Premium
Start Date | End Date | Pay Date | Premium |
---|---|---|---|
2019/04/01 |
2019/04/01 |
02-April-19 |
$2.43 |
2019/04/02 |
2019/04/08 |
02-April-19 |
$17.00 |
2019/04/09 |
2019/04/15 |
02-April-19 |
$17.00 |
2019/04/16 |
2019/04/22 |
02-April-19 |
$17.00 |
2019/04/23 |
2019/04/29 |
02-April-19 |
$17.00 |
2019/04/30 |
2019/05/06 |
02-April-19 |
$17.00 |
2019/05/07 |
2019/05/13 |
02-April-19 |
$17.00 |
The date paid to gets moved to 13th May and registration gets marked 'Applied'.
Scenario 6: For Periods with Zero Premium
Consider a policy having zero premium for the three policy calculation periods for each month between the 1st of March and to the 31st of May. Oracle Health Insurance receives registration of $0 on the 1st of March (pay date). The policy has consecutive policy calculation periods for March and April that are available for processing. There is no existing mutation on the policy.
- Process Registration
-
The operation applies a registration with a zero amount for the two calculation periods, March and April. The operation updates the Pay Date for both the periods with the pay date of the registration. It marks the registrations as Applied.
- Apply Registration to Periods
-
This operation sets the
Look Back Date
to determine when to recalculate the premium. There is no mutation, and the application receives a registration with a zero amount on the 1st of March. The operation sets the look back date to the 1st of March.
The operation applies registration with a zero amount to March. It recalculates the premium for the next period of April. Since April has a premium of zero dollars, the operation applies a registration with a zero amount for this month. Since the operation keeps generating periods, it continues by applying registration to periods with zero amount. It continues to do so until it finds a period with a non-zero premium or the operation cannot generate any more periods. In this example, the month of March, April, and May get registration with zero amount.
Periods and Premium:
Start Date | End Date | Pay Date | Premium |
---|---|---|---|
2019/01/01 |
2019/01/31 |
01-Jan-19 |
$50.00 |
2019/02/01 |
2019/02/28 |
01-Feb-19 |
$50.00 |
2019/03/01 |
2019/03/31 |
01-March-19 |
$0.00 |
2019/04/01 |
2019/04/30 |
01-March-19 |
$0.00 |
2019/05/01 |
2019/05/31 |
01-March-19 |
$0.00 |