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.

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 (PYR). Payment Run (PYR) 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 (PYR):