Excess Credits

Overview

Typically, funds flow in one direction only within an insured’s billing account: inward. Customers accrue charges based on provided coverage, and they send payments to cover those charges. Occasionally the funds can move in the other direction, where the carrier must send a disbursement back to the insured. This can happen in situations like:

  • Return premium from policy changes that reduce overall premium.

  • Cancellations

  • Overpayments

  • Erroneously sent or applied payments

  • Reallocating payments such that greater amounts are allocated to credit balances

  • Ad-hoc credits

To avoid accrual of too much credit for any particular account, you can use rules about when and how credits beyond a desired threshold are to be returned or otherwise used.

Configuration

Automatic handling of excess credits requires creating one or more Excess Credit Plans, each of which describe the rules for handling excess credits. Each insured account in the system can be assigned an excess credit plan, and then the rules for that plan will be activated for that account.

An excess credit plan looks like this:

ExcessCreditPlanRef
required
disburseExcess boolean
Set to true to enable excess funds handling for the plan.
disbursementType string
The type of the disbursement to be automatically created.
excludeDebits Enum none | pastDueInvoices | allInvoices | invoicesAndUnbilledInstallments
Which pending debits should be considered for determining how much of the credit to retain
disbursementThresholds map<string,number>

The disbursementType property should be set to one of the disbursement types configured in the system.

Process

If an excess credit plan is assigned to an account and that plan has disburseExcess: true, then each time that account’s credit balance is increased, the system will do the following:

  • Start with the new credit balance amount.

  • Reduce it as indicated with the excludeDebits property.

  • Disburse the difference to the insured with a disbursement given by the disbursementType property on the plan.

  • The details about the disbursement, including its credit balance source, will be available on the newly-created disbursement entity.

For example, if excludeDebits is allInvoices, the sum of the unsettled amount for all outstanding invoices should be deducted from the credit balance amount. If the remainder is greater than zero, create a disbursement with amount equal to this remainder, and automatically execute it.

Note

It is possible in some cases for the excess amount (as it would be calculated above) to increase even if the credit balance itself does not increase, such as when payments are received while funds remain in a credit balance. Excess credits handling is not automatically triggered in those cases.

See Also