Manual adjustments for recovery receipts

Manual adjustments for recovery receipts occur when a recovery receipt is issued on an incorrect L1/L2 reserve category. Setting reserves and issuing recovery receipts on the wrong L1/L2 reserve category can occur in the following situations:

  • A claim is entered without a policy.
  • There is an out-of-sequence endorsement on a policy that the claim is filed against.
  • User error.

Users with specific permissions can complete manual adjustments. For example, clients can determine that users with the role Claims Supervisor have permission to complete manual adjustments.

Completing a manual adjustment is a multi-step process. To complete a manual adjustment you will move a recovery receipt from one L1/L2 reserve category to another L1/L2 reserve category within the same exposure, in a different exposure within the same claim, or in a different exposure in a different claim. To ensure that reserves and recovery receipts balance, first:

  1. Identify the recovery receipt amount, claim number, exposure ID, L1/L2 reserve category, transaction code, and transaction ID of the original recovery receipt.
  2. Identify the claim number, exposure ID, L1/L2 reserve category, and transaction code of the new recovery receipt.

After you identify the above information as well as where the original recovery receipt is located and where the recovery receipt will be moved to, complete the following:

  1. Offset the original recovery receipt amount.
  2. Locate and set the new reserve.
  3. Create a new recovery receipt for the same amount.

Offset the original recovery receipt

  1. In the Exposure Accounting Summary associated with the original recovery receipt, navigate to the Actions column of the L1/L2 reserve category that the original recovery receipt was issued on, and select Add Recovery.
  2. In the Recovery receipt dialog box, complete the Payor, Street Address, Additional Street Address (if applicable), and Zip boxes.

    Note: The information you type in these boxes must match the information on the original recovery receipt.

  3. Ensure the information displayed in the Reserve Category and Transaction Code boxes is correct.

    Note: The information displayed should match the information on the original recovery receipt.

  4. From the Payment Method box, select Manual Adjustment.
  5. In the Received Date box, ensure that today’s date is displayed.
  6. In the Amount box, type – <Original recovery receipt amount>. For example, if the original issued recovery receipt is $500, to offset this recovery receipt amount and return the L1/L2 reserve category to its original reserve, you would type -500.
  7. When you select Manual Adjustment, the Comments box becomes a required field. In the Comments box, type the reason for the manual adjustment, and reference the claim number, exposure ID/coverage name, L1/L2 reserve category, transaction code, and transaction ID of the original recovery receipt. You can also reference the claim number, exposure ID/coverage name, L1/L2 reserve category, and transaction code of the new recovery receipt. For example:

    This recovery receipt <Claim NumberExposure IDCoverage Name>, <L1/L2 Reserve Category>, <Transaction Code> as Transaction ID: <Transaction ID> has been moved to <Claim NumberExposure IDCoverage Name>, <L1/L2 Reserve Category>, <Transaction Code>.

  8. Select Save Recovery Receipt.

Locate and set the new reserve

Ensure the manual adjustment is completed correctly and that the reserves and recovery receipts balance by identifying the correct L1/L2 reserve category and setting the reserve amount.

  1. Navigate to the Exposure Accounting Summary associated with the exposure that the recovery receipt will be moved to. Locate the correct L1/L2 reserve category for the recovery receipt.
  2. Review the reserve amount set.
  3. If the reserve amount is less than the new recovery receipt amount, select Edit Reserve. The Edit Reserve dialog box will open.
  4. In the New Reserve box, type the new reserve amount. This amount must be equal to or more than the payment amount. The Change By box will automatically update with the value you’re updating the reserve by.
  5. In the Comments box, type the reason for changing the reserve. For audit purposes, it is helpful to note the claim number, exposure ID/coverage name, L1/L2 reserve category, transaction code, and transaction ID of the originating recovery receipt as well as the claim number, exposure ID/coverage name, L1/L2 reserve category, and transaction code of the new recovery receipt. For example:

    Reserve change for recovery receipt. This recovery receipt <Claim NumberExposure IDCoverage Name>, <L1/L2 Reserve Category>, <Transaction Code>, with Transaction ID: <Transaction ID> has been moved to <Claim NumberExposure IDCoverage Name>, <L1/L2 Reserve Category>, <Transaction Code>.

  6. Select Save Recovery Reserve.

Create new recovery receipt

  1. In the Actions column of the Exposure Accounting Summary associated with the L1/L2 reserve category, select Add Recovery.
  2. Complete the Payor, Street Address, Additional Street Address (if applicable), Zip boxes.

    Note: The information you type in these boxes should match the information from the originating recovery receipt.

  3. In the Reserve Category and Transaction Code boxes, ensure the correct information is displayed.
  4. From the Payment Method dropdown list, select Manual Adjustment.
  5. In the Received Date box, ensure today’s date is displayed.
  6. In the Amount box, type the recovery receipt amount, which should match the amount of the originating recovery receipt.
  7. When you select Manual Adjustment, the Comments box becomes a required field. In the Comments box, type the reason for the manual adjustment, and reference the claim number, exposure ID/coverage name, L1/L2 reserve category, transaction code, and transaction ID of the original recovery receipt. For example, the template for the Comments box could be:

    This recovery receipt was moved from <Claim NumberExposure IDCoverage Name>, <L1/L2 Reserve Category>, <Transaction Code> as Transaction ID: <Transaction ID>.

  8. Select Save Recovery Receipt.