Using the Hierarchy to Produce Consolidated Payments
A policy may be underwritten by several different underwriters to spread the risk. The risks may be placed with these underwriters in a hierarchical structure. These individual underwriters and this hierarchical structure can be recorded on the detailed claim or premium transactions, posted to the client and underwriter accounts. The structure details can be used to consolidate the transactions and these consolidated values can be viewed on inquiries and reports.
See Recording the Principal to Principal Hierarchy for an explanation of how the hierarchy is defined.
The hierarchy structure details can also be used to produce consolidated payments, at different levels in the hierarchy. For example, if a claim has been split across several underwriters all of whom have paid, a consolidated payment could be produced for the client. If however only one of the underwriters has paid, a claim payment could be produced for the client that only paid the amount that had been received from this underwriter.
The transactions are selected for payment based on the hierarchy column codes, as well as the other transaction details. The transactions are selected using a control desk filter and then passed to Payment Run. See the Initiating a Payment Run from a Control Desk section in the Financials User Guide / Help. Payment Run includes an optional Consolidate Hierarchy flag as one of the consolidation options.
This is best illustrated with a worked example.
The following claim transactions were posted to Client account 1 for transaction 123.
| Tx Ref | Posting Ref | Account | Amount | Hierarchy Column 1 | Hierarchy Column 2 | Hierarchy Column 3 | Hierarchy Column 4 |
| 123 | 1 | Client 1 | 42.75 DR | Client 1 | 0861 | 0862 | 0863 |
| 123 | 2 | Client 1 | 32.35 DR | Client 1 | 0861 | 0862 | 1209 |
| 123 | 3 | Client 1 | 16.50 DR | Client 1 | 0861 | 0588 | 0589 |
| 123 | 4 | Client 1 | 8.50 DR | Client 1 | 0861 | 0588 | 1209 |
The hierarchy structure built by these hierarchy codes is as follows:
The following payments could be produced for the client from the hierarchy, when the different selection criteria and consolidation choices identified below are made in Payment Run:
No Consolidation
Payment Run Selection: Select all postings for Client 1 for transaction reference 123, no selection by hierarchy codes, no hierarchy consolidation flag.
Result: Four payments are produced.
Top Level Consolidation
Payment Run Selection: Select all postings for Client 1 for transaction 123, elect to consolidate the hierarchy.
One payment is produced for GBP 100.
Intermediate Level Consolidation
Payment Run Selection: Select all postings for Client 1 for transaction 123, select 0862 for Hierarchy column 3, and elect to consolidate the hierarchy.
One payment is produced for GBP 75.
Lowest Level Consolidation
Select all postings for Client 1 for transaction reference 123, select 0863 for Hierarchy column 4, and elect to consolidate the hierarchy.
One payment is produced for GBP 42.75.