Set up automatic assignment of billing schedules

Clients can enable a setting that defines billing schedule thresholds. If initial or renewal payments fall within a defined threshold, the system will automatically change the associated policy’s billing schedule to match the payment made. Written Premium + Installment Fee(s), plus or minus the defined threshold, will trigger a billing schedule change.

For example:

  • To be moved to an Annual billing schedule, payment must be made within the following range: ((Written Premium + Installment Fees) + Defined Threshold) and ((Written Premium + Installment Fees) – Defined Threshold).
  • It is assumed that to be moved to the Semi-Annual billing schedule, payment must be made within the following range: (((Written Premium + Installment Fee) / 2) + Defined Threshold) and (((Written Premium + Installment Fee) / 2) – Defined Threshold).

To enable the setting and define the threshold:

  1. Navigate to Settings > Modules > Policies.
  2. Select Edit beneath Policy Lifecycle. The Confirm dialog box will open with the following message:
    You are about to leave the page. Would you like to save your data before proceeding?
  3. Select Yes to save and proceed to the Policy Lifecycle screen, or select No to proceed to the Policy Lifecycle screen without saving.
  4. From the Choose a State dropdown list, select the state that you’re enabling the setting for.
  5. Select one of the following radio buttons: Lifecycle Parameters Are the Same for All Business or Lifecycle Parameters Are Defined Per Policy Type.
    Note: If you select Lifecycle Parameters Are Defined Per Policy Type, you will be prompted to select the policy type you’re enabling the setting for.
  6. Navigate to Payment > Renewals.
  7. Select the For new business and renewals, automatically match the billing schedule to the amount of the payment checkbox. The Threshold Settings Per Billing Schedule box will appear below the setting.
  8. Select the associated checkboxes for the billing schedules you want to apply thresholds to.
  9. Type the threshold amount in the box associated with each selected billing schedule.
  10. Select Save or Save and Exit.

Example of setting and threshold application

Client A has established Annual and Semi-Annual billing schedules. Client A has chosen to enable the For new business and renwals, automatically match the billing schedule to the amount of the payment setting, and has defined the following thresholds:

  • Annual billing schedule: The threshold is $5.00.
  • Semi-Annual billing schedule: The threshold is $5.00.

The Written Premium for policy P-2020-1 is $1000.00, the Installment Fee is $0.00, and in the initial policy term, P-2020-1 was assigned to the Annual billing schedule. At renewal, payment was issued for P-2020-1 in the amount of $498.00.  See below:

((($1000.00 + $0.00)/2) + $5.00) = $505.00

((($1000.00 + $0.00)/2) – $5.00) =  $495.00

The Semi-Annual billing schedule threshold is $495.00 to $505.00. The amount of $498.00 falls within the Semi-Annual threshold, so P-2020-1 is automatically moved to the Semi-Annual billing schedule.

If a payment of $506.00 was issued for P-2020-1, then the policy would have remained on the Annual billing schedule upon renewal.

Usage considerations

  • This setting only affects policies with an outstanding invoice. If a payment that falls within the threshold of another billing schedule is made on a policy, but no invoice is due, then the billing schedule will remain unchanged and the payment will process as usual.
  • This setting only affects payments made on single policies. If payment is made on multiple policies, the associated billing schedules will remain unchanged.
  • Fees other than installment fees, such as non-pay or reinstatement fees, are not included in the overall calculation that the setting’s threshold is based on.