BILLING INTRODUCTION. Agency Bill and Direct Bill Statements. Commission. Agency Bill. Direct Bill

Transcription

1 ONTARIO BILLING MANUAL

2 INTRODUCTION This manual outlines the procedures followed by the company in the administration of the billing and collection process. The manual is organized as follows: Agency Bill and Direct Bill Statements Commission Agency Bill Direct Bill Full Payment Three Payment Monthly pre-authorized payment (PAC) Change between Agency Bill and Direct Bill Credit Card Internet/Telebanking Endorsements Cancellations Bank Rejections Reinstatements Refunds Summary of Notices 1

3 AGENCY BILL AND DIRECT BILL STATEMENTS Statements are forwarded on a monthly basis detailing all transactions for the current month. Transactions processed in the current month for an effective date after the end of the month will not appear on the current statement. Please contact our Cash Management department if there are any discrepancies identified between your records and the statements provided to you. COMMISSION Commission is calculated by multiplying the policy premium by the commission rate, excluding taxes and service charges. Commission amounts for Direct Bill policies are deposited by the 5 th business day of each month for Brokers set up for Electronic Funds Transfer. Manual cheques are sent out by the 10 th business day of each month for all other Brokers. Please contact our Financial Reporting department if you wish to receive your payment through our EFT option. AGENCY BILL All payments are remitted from the Insured directly to the Brokerage. Agency bill accounts are payable net 60 days and represent total premiums less commission. Retail sales tax is collected directly by the Brokerage and remitted directly to the appropriate taxing authority. DIRECT BILL The total amount payable equals the total premium plus Retail Sales Tax and the PAC service charge if applicable. There are three types of Direct Bill: Full Payment, Three Payment and Pre-Authorized Chequing (PAC). Full Payment This plan allows the policyholder to remit payment in one lump sum. The policyholder must remit payment in full by the effective date of the policy or upon issuance of the policy for New Business. Methods of payment include: Internet/Telebanking, Cheque, Credit Card (Visa or MasterCard only), Money Order, Certified Cheque and Bank Draft. Three Payment This plan allows the policyholder to remit payments in three installments by post-dated cheques or by credit card. The policyholder must remit full payment of the policy premium within 60 days. Three cheques or scheduled credit card payments, each with a minimum amount of one third (33%) of the total premium, must be submitted together to the Cash Management Department. The initial payment must be current dated and the 2 nd and 3 rd should be postdated for no later than 30 and 60 days after the effective date of the policy, respectively. Pre-Authorized Chequing (PAC) With this plan, payments are withdrawn automatically from the policyholder s chequing account with a bank, trust company or credit union in monthly installments. A completed and signed Pre-Authorized Variable Debit (PAD) Agreement form with a void cheque must be maintained at the broker s office. Any withdrawal date, without restriction, may be selected for clients on PAC. Changes to the scheduled withdrawal date can be processed using U-Connect. Renewals: The total amount payable is spread equally over 12 payments for renewals commencing within 30 days prior to the effective date. If for any reason we are unable to collect 12 equal payments, the premium will be spread over the remaining months. 2

4 New Business: The total amount payable is spread equally over 12 payments for New Business commencing within 30 days prior to the effective date. If for any reason we are unable to collect 12 equal payments, the premium will be spread over the remaining months and the first payment will be doubled. Where the premium is spread over 11 withdrawals with a double first payment (See Table 1-1) The new business transaction must be processed with 13 days notice for the payment in the same month as the policy effective date The system will divide payments into 12 and spread over 11 withdrawals taking two payments on the first withdrawal of the policy term. Where the premium is spread over 10 withdrawals with a double first payment (See Table 1-1) The new business transaction must be processed with 13 days notice for payment in the month after the policy effective date The system will divide payments into 11 and spread over 10 withdrawals taking two payments on the first withdrawal of the policy term Table: 1-1 Withdrawal date selected by Insured : 21st Policy Effective: th 12 Pay 11 Pay 10 Pay May 15 $1200 Ann. Prem. Transaction processed April 7 th Transaction processed May 7 th Transaction processed June 7th April 21, 2013 $100 May 21, 2013 $100 $200 June 21, 2013 $100 $100 $ July 21, 2013 $100 $100 $ August 21, 2013 $100 $100 $ September 21, 2013 $100 $100 $ October 21, 2013 $100 $100 $ November 21, 2013 $100 $100 $ December 21, 2013 $100 $100 $ January 21, 2014 $100 $100 $ February 21, 2014 $100 $100 $ March 21, 2014 $100 $100 $ Changes to bank information may be made through U-Connect up to 2 business days before the scheduled withdrawal date. A change from Full Payment to PAC or PAC to Full Payment should be sent to the Cash Management department for processing. The PAC option is subject to a service charge of 3% for property. In automobile, the service charge is the maximum rate that an insurer may charge in accordance with regulations. For additional information about the automobile service charge, please visit the following website: Information can be found under section 3 of Regulation 664 of the Insurance Act. 3

5 The PAC option is available for all policies. For packaged (multi-line) policies, this option is available for varied policy terms to match expiry dates. The service fee is applied to the total premium. Monthly payment by any method other than automatic banking withdrawal is not available for clients set up on PAC. We reserve the right to decline PAC to a policyholder in accordance with regulations. CHANGE BETWEEN AGENCY BILL AND DIRECT BILL Policies cannot be changed from Agency Bill to Direct Bill or Direct Bill to Agency Bill. The current policy must be cancelled and a new policy issued for such a change to occur. CREDIT CARD For credit card payment, the Insurance Broker must obtain detailed information from the insured. If a scheduled credit card payment is declined, a registered letter of cancellation will be sent to the Insured providing 33 days notice. If a credit card payment for a renewal is declined before the renewal date, the Broker will be contacted to obtain an alternate form of payment. Monthly Pre-Authorized Payments may not be made by credit card. This form of payment may be used for down payments on New Business paid by Pre-Authorized Payments and for any payments for Full Payment or Three Payment policies. INTERNET / TELEBANKING Depending on the policyholder s banking institution, the policyholder may make a payment to Unica directly from their bank through the Internet or by Telebanking. Unica has arrangements with the following banks: Bank of Montreal CIBC Credit Union Central of Ontario National Bank of Canada Royal Bank Scotiabank TD Canada Trust As the list of banking institutions may vary, please refer to the Unica Cash Management department for the current list. Monthly Pre-Authorized Payments may not be made by Internet/Telebanking. This form of payment may be used for down payments on New Business paid by Pre-Authorized Payments and for any payments for Full Payment or Three Payment policies. ENDORSEMENTS The premium for mid-term changes is applied on a pro-rata basis except for policyholder requested cancellations. For Full Pay policies, the balance or refundable after processing the endorsement will be billed to the policyholder or a refund cheque will be issued. 4

6 For Monthly Pay Policies, the balance or refundable will be spread over the remaining monthly payments. The adjustment to the monthly payments will be handled immediately upon the processing of the endorsement and a 12 th payment in the term will be scheduled if there are no remaining payments and the renewal has not been issued. If the endorsement is processed after the Renewal has been issued, the balance will be carried forward and included in the monthly payments for the new Renewal term. CANCELLATIONS For mid-term policy cancellations requested by the Insured, the premium is calculated on a short-rate basis. The premiums for a cancellation initiated by the Company for underwriting or non-payment reasons will be calculated on a pro-rata basis. A cancellation request from the Insured within 30 days of the effective date of a Renewal indicating that the policyholder wishes to have the Renewal cancelled at the effective date of the policy will be treated as a flat rate cancellation with no premium for the Renewal term. If the policyholder indicates a date of cancellation after the effective date of the Renewal, this will be treated as a shortrate mid-term cancellation. A cancellation notice will be sent to the policyholder and the Broker advising of the cancellation of the policy along with any balance or refundable. Refunds are processed within 10 business days. BANK REJECTIONS 1 st Bank Rejection in a Policy Term If a scheduled payment is returned for any reason, a registered letter is sent notifying the Insured that the policy will be cancelled if the payment is not within the notice period (33 days). 2 nd Bank Rejection in a Policy Term In the event of a second bank rejection for any reason within a given term, the policy will be cancelled by registered letter for non-payment of premium unless payment is within the notice period (33 days). 3 rd Bank Rejection in a Policy Term In the event of a third bank rejection within a given term, the policy will be cancelled by registered letter. Payment made within the notice term (15 days) will not reinstate the policy. Automatic Representment If any scheduled withdrawal is returned to non-sufficient funds (NSF) or funds not cleared, a reattempt will be made by the bank within 5 business days. If the second attempt is unsuccessful, a registered letter is sent notifying the Insured as noted above. If a rejection is to a bank error, a letter from the financial institution is required. All bank and dishonoured payments are subject to a $50.00 dishonoured payment charge. REINSTATEMENTS A policy to be cancelled will be reinstated upon receipt of the amount outstanding as well as any applicable fees if within the notice period and the notice indicates that the policy will be reinstated upon payment of the amounts. Payment must be in guaranteed funds only. Payment by Internet/Telebanking and credit card is acceptable. 5

7 Any policy that has been cancelled to 3 or more NSFs will only be reinstated with the approval of the Underwriting department. REFUNDS Credit balances on all policies will be processed and cheques will be issued within 10 business days following the transaction that generated the credit. Refunds are issued by cheque payable to the named policyholder only (as required by law). Credit balances under $10.00 will remain on active policies and transferred to the subsequent term unless the policyholder requests a cheque. Credits under $2.00 will not be refunded on cancelled policies. 6

8 SUMMARY OF NOTICES Type Of Transaction Full Pay New Business & Renewal Full Pay - Endorsement PAC New Business PAC - Renewal PAC - Endorsement Bank Rejections Refund Write off uncollected premium Category Type Of Notice When Issued Payment Due Date Payment less than amount Payment less than amount No payment on Renewal No payment on Renewal Endorsement on Full Pay Policy issued Policy issued Endorsement on PAC Partial payment notice Registered letter Renewal reminder notice Registered letter Policy Declaration with invoice indicating balance Policy Declaration with invoice indicating balance Policy Declaration with invoice indicating balance Premium adjustment and payment adjustment Bank rejection on PAC 1 st Registered letter - 2 nd Registered letter - 3 rd Registered letter Other bank rejections Balance refundable Bad debt writeoff Registered letter N/A Uncollected Premium When short payment 33 days prior to carry date Issued 5 days prior to effective date Issued 30 days after effective date Upon processing of Endorsement Upon processing of policy 45 days before effective date Immediate Bank notice Bank notice Bank notice Bank notice Within 10 business days Immediate Renewal date First payment minimum of 13 days after date of issue with installments spread over 12 months 12 installments with 1st payment commencing during the 30 days prior to effective date Spreads balance over remaining payments 7