‘Policy Activity’ is the term used in the Agency Advantage for accounting records. Policy activity represents the financial transactions associated with the sales and service of insurance policies. These records form the basis of production reporting and company statement reconciliation.
We will begin our discussion of policy activity on Mr. Carpenter’s auto policy. Notice that the total premium in the upper right of the screen is not highlighted.
Lets create a change in premium for this policy simulating an endorsement. Editing the first vehicle on this policy allows us to enter $100 of additional premium to the policy. When we click the save button notice that the total premium increases by $100 and becomes highlighted! This is a visual queue indicating that the premium for this policy has changed and no policy activity has been entered.
On the ‘Production and Volume Reports’ menu you will find an ‘Incomplete Transaction Listing’. This is a listing of all policies where the total premium is highlighted. This is a good management tool to make sure the activity has been entered for each policy! Whenever we exit a policy screen where the total premium is highlighted the policy activity entry screen will automatically appear.
Notice in the upper section of the screen that the system uses the current premium minus the last premium to calculate the net change. The company name, original commission plan name, original commission percentage, policy csr and current user are filled in automatically. The effective and transaction dates default to today. The effective date can be changed but the transaction date is always today. All production reporting is done by transaction date.
In this example the type of activity is an endorsement. We can click the option button, use the right arrow key or simply press ‘E’ to highlight endorsement. Pressing ‘Tab’ takes us to the effective date window. If we accept the effective date by pressing ’Tab’ the system prorates the $100 change automatically. We can accept the calculated premium or enter another figure here. Pressing ‘Tab’ takes us to the commission plan lookup box. Most of the time the original commission plan percentage is used when calculating endorsements, but you can select another plan here. When enter New, Renewal or Re-Write transactions this plan and percentage are stored in the policy. Pressing ‘Tab’ takes us to the commission percentage and ‘Tab’ again calculates the agency’s commission amount. We can accept this amount or enter another figure. The next two entries are for the policy producer and commission, if any. Next is the description. You are required to enter a description for each activity record. We will enter ‘Increased coverage’ as the description. The final entry defaults to the user who entered the activity record. Clicking the save button completes the process and returns us to the customer folder.
Let’s discuss other types of activity transactions. At any time we create an activity transaction by choosing the ‘Add’ button under the activity browse. One of the most common uses for this is when add-on products are sold. These are referred to as ‘Special’ activity transactions. (Choose special and press ‘tab’) As you can see the system wants us to choose a different company for this activity transaction. (Pick Road Service Plan and tab down to premium.) You will need to supply the premium amount and choose a commission plan for special activity transactions. (enter a premium, pick a plan and tab to agency commission)
The 'Miscellaneous' activity type is used for the initial setup of existing policies from your files. When you first enter an existing policy from your files into The Agency Advantage you must carefully handle the activity entry. The Net Change on the activity screen will show the full policy premium. This may tempt you to choose New as the transaction type. Entering New will create an unreconciled production record dated today for a piece of business that was produced and reconciled months ago! The proper way to handle this situation is to enter a Miscellaneous activity with a zero premium. Use ‘Initial setup’ in the description field. This will satisfy the system’s activity accounting without distorting production reports or the reconciliation process.
The New, Renewal and Re-Write transaction types do not prorate the net change in policy premium but use the total premium instead. The Re-Write transaction type helps separate the count of actual new policies written from situations where the company requires you to rewrite an existing customer. As mentioned earlier these transaction types cause the commission plan name and percentage to be saved in the policy header record.