Deposits in final audit

In PolicyCenter, whenever a final audit completes in PolicyCenter, the collateral billing instruction releases the deposit by sending a requirement of $0 (zero dollars). This instruction applies to any final audit, both expiration and cancellation.

In BillingCenter, the active collateral requirement changes to closed. BillingCenter releases money paid and held as a “cash held by requirements” balance to the category of collateral cash held. The collateral cash is available for transfer. Typically, the insurer eventually transfers this amount to either pay off the final audit balance or apply the funds to the segregated collateral requirement of the renewal policy period.

An exception to the preceding rules occurs for PolicyCenter transactions after a final audit completes. PolicyCenter may produce transactions such as policy changes after a final audit completes. Such transactions result in reversing the final audit, followed by a policy change, followed by scheduling a new final audit. In such a case, an insurer does not want to bill the insured for a new deposit. After the final audit releases the deposit, the deposit remains released, unless a user reinstates a cancelled policy.

The base configuration PolicyCenter logic tracks the last calculated deposit amount and whether that deposit was already released. After releasing the deposit, PolicyCenter sends a deposit of $0 (zero dollars) with each type of message from PolicyCenter to BillingCenter. After a deposit is released, only a reinstatement unreleases the deposit.