Add reinsurance to a policy

About this task

Reinsurance is added to a policy at quote. In these instructions, you create a commercial property policy on the Wright Construction account by using the large sample data set. For more information, see Install sample data.

When you install the sample data, PolicyCenter creates programs and one-year reinsurance agreements that are effective on the day you install the data. These instructions have you set the policy effective date one month in the future to see what happens when a policy is in effect beyond the end of the agreement.

Note: You can quote, bind, and issue a policy with projected reinsurance agreements.

Procedure

  1. As the underwriter, aapplegate, go to the Wright Construction account.
  2. Select Actions > New Submission.
  3. Set the Default Effective Date to one month in the future.
  4. Select the Commercial Property product.
  5. Advance to the Building and Locations screen.
    1. In the Actions column for the primary location, select Add Building > New Building.
    2. In Property Class Code, enter 0010.
    3. For Coverage Form, select Building and Personal Property.
    4. Click the Coverages tab.
    5. In Business Income Coverage > Income Limit - Not Mfg or Rental, enter 1,000,000.
    6. Click OK.
  6. Quote the policy.
    Under Tools in the left sidebar, the Reinsurance menu item appears.

    The Reinsurance plugin assigns reinsurance programs to the policy. For more information see, Reinsurance plugin.

  7. Select Tools > Reinsurance.

    PolicyCenter displays the Reinsurance screen.

    On the Coverage tab, PolicyCenter displays a list of Reinsurable Risks. PolicyCenter displays an Applicable Reinsurance section if it was able to assign reinsurance.

  8. Select a risk to display Risk Details.
    In this example, the View As Of drop-down list displays two date ranges. The first date range begins on the policy effective date and extends until the first program ends. The second date range begins when the first program ends and extends until the end of the policy term. PolicyCenter attaches agreements to the policy based on whether the agreement is specified as policy attachment or loss date attachment.
  9. Select the first date range from the View As Of drop-down list.
    The Per Risk tab displays the reinsurance agreements assigned to the currently selected risk. In this example, the Reinsurance plugin selected the Property PY2011 program. The per risk treaties in this program appear on the Per Risk tab in the submission. The aggregate treaties in this program appear on the Aggregate tab.
  10. Select the second date range from the View As Of drop-down list.

    The quota share and surplus treaties are policy attachment treaties which attach when the policy starts and remain for the policy term. Therefore, these treaties are unchanged in the second date range. The Property NXOL PY2011 treaty is a loss date attachment treaty which attaches to the policy for the duration of the treaty.

    For the second date range, there is no active program for those dates which contains loss date attachment treaties. Therefore, PolicyCenter looks for draft programs for that date range, but finds none. Then PolicyCenter looks for and finds an active program from the prior year. This active program contains a loss date attachment treaty. PolicyCenter displays the treaty from the first date range and marks it as Projected by using the assumption that the treaty will be extended to another year. If PolicyCenter had found a treaty in draft status, then PolicyCenter would attach the treaty to the policy and mark it as Projected.

    For descriptions of the Reinsurance screen fields, see Reinsurance screen in the policy file.

  11. If you make a change, click Save Draft to validate all agreements on that policy term. Save Draft only appears in policy transactions.

What to do next

From the Reinsurance screen in a policy file, you can take additional actions as described in the following topics: