Renewal offers flows

This topic describes how the base configuration billing integration handles renewal offers.

PolicyCenter selects the proper payment plan before issuing the renewal, but PolicyCenter does not requote the policy period to recalculate premiums. BillingCenter sends PolicyCenter an amount paid and optionally a payment plan code to indicate what the insured chose. Best practice is to use an explicit plan choice, but PolicyCenter can choose the plan that seems most appropriate. If BillingCenter does not provide a plan code, PolicyCenter chooses the payment plan with the largest down payment requirement less than or equal to the amount paid. Based on the amount paid, PolicyCenter makes the best assessment of whether the insured wants to pay all up-front, or to choose 2-payments, 3-payments, and so on.

PolicyCenter verifies that the amount paid is sufficient to meet the down-payment required. If the insured does not send enough to meet the selected plan, PolicyCenter raises an error and an activity to investigate is generated for a BillingCenter user. If the insured provides no plan code, PolicyCenter checks whether the amount is sufficient for any plan. If no (adequate) payment signal is received in time, the PolicyCenter workflow moves the renewal job to not taken.

In the renewal offers flow, receiving a payment signals that the insured accepted the offer. The billing system sends PolicyCenter notice of payment from BillingCenter by using the PolicyRenewalAPI web service method notifyPaymentReceivedForRenewalOffer. This API also sets PolicyTerm.Bound to true. This means that Bound is true whenever the renewal job completes. Only then does the insurer bind the policy.

The insurer initially sends a renewal notice (including pricing and payment plans) but does not book premiums for accounting or statistics. If payment is received, the billing system tells PolicyCenter to bind. Otherwise, a PolicyCenter timeout triggers PolicyCenter to mark the renewal offer as not taken. The timeout includes any grace period in which they can reinstate with lapse.

In some cases, an insurer indicates payment options in the renewal offer, such as $500 for full payment or $100 down payment for an installment plan. Based on the amount received, the insurer decides which option was selected and tells PolicyCenter to bind the renewal and chooses which. The actual premiums calculated by rating will be different depending on the payment plan chosen, so PolicyCenter requotes the policy with the option chosen prior to binding the renewal.

Note: Some insurers may accept payment within a grace period. In other words, if the payment is past the grace period, the renewal adjusts to start on the date of payment, not on the original renewal period effective date. The policy renews but with a lapse in coverage. However, PolicyCenter and BillingCenter do not support automatic renewal with lapse in the base configuration.

It is also possible to receive a payment signal from BillingCenter while PolicyCenter is not in a waiting state. PolicyCenter handles the following cases:

  • If PolicyCenter renewed the policy already (this is a race condition), PolicyCenter returns in a way that causes the payment to apply to the renewal without raising any errors.
  • If it is any other wrong status, PolicyCenter returns an error that creates a new activity in BillingCenter to investigate. For example, the BillingCenter user might need to determine whether:
    • To return the funds
    • To redo the renewal, since the insured apparently does want a policy
    • The renewal was undergoing changes but was still issued

See also