A policy transaction is an event on the policy. The policy's history is made up of all events on the policy.

 

The below abbreviations are for standard transaction types:

 


If a different abbreviation appears, then it is most likely not a true transaction type, such as (PMT) or (STL) on a Commission Statement.

  • (PMT) - Stands for Payment, which is not actually a policy transaction. It is more of an activity on the policy.
  • (STL) - Stands for Installment, which typically means a customer is making monthly payments to the carrier. This transaction type may appear on a downloaded Commission Statement.
  • (DB SYNC) - Stands for Database Synchronization, which typically means an agency has received an initial policy download from the carrier.



Premium Type
  		Glossary Definition
  		  Purpose
  		Calculated
  		Entered by User
  		Where Used
  
Written Premium
  		The amount of money  an insurance company charges an insured for first issuing a policy (Initial  Term Premium), or at subsequent endorsement of the policy (Endorsement  Premium).

Written Premium is comprised of the sum of Initial and Endorsed Earned Premium plus Initial and Endorsed Unearned Premiums as follows: [Written Premium = (Earned Initial Premium + Earned Endorsement Premium) + (Unearned Initial Term Premium + Unearned Endorsement Premium)]
  		The total amount on  the policy declaration page.  Used by insurance companies to report  premium volumes to the various state departments of insurance.
  		On Renewal from Full Term Premium
  		Yes
  		Labeled as premium  in Policy Header & Accounting
  
Initial Term or Renewal Term Premium
  		The amount of money  a carrier will charge an insured for an entire term of the policy as of the  day it is first issued or renewed.
  		Used as the first  element to determine the Written Premium
  		No
  		No
  		Not Stored
  
Invoice or Billing Premium
  		Includes Written  Premium, Endorsement Premium, plus any policy fees not included in the total  amount on the declaration page of the policy.
  		Used by agents to  invoice for policies sold to insureds
  		Yes
  		No
  		Accounting
  
  Endorsement or Change Premium
  		The net amount of  money to be billed or credited to an insured consisting of Additional Premium  (Net positive change in premium) or Returned Premium (Net negative change in  premium) a policy receives due to a change in coverages or exposures during  its policy term.
  		Used to determine  the amount to invoice an insured for a change to their policy
  		No
  		Yes
  		Accounting
  
Additional Premium
  		Additional Premium  occurs when there is a change to a policy’s coverage or exposures that  results in a net positive change thereby increasing the Written  Premium.  Adding a piece of scheduled jewelry to a policy mid-term would  be an example of Additional Premium.
  		Used to show how  much of an increase is due from an insured from a policy change
  		No
  		On  policy change
  		See Endorsement  Premium
  
Return Premium
  		Return Premium  occurs when there is a change to a policy’s coverage or exposures that  results in a net negative change thereby reducing the Written Premium.   Return Premiums typically generate a credit on the insured policy and rarely  result in the company actually refunding the money by issuing a check to the  insured. Selling a car and taking it off the policy mid-term would be an  example of Return Premium.
  		Used to show how  much of a credit is due to be returned to an insured from a policy change
  		No
  		On  policy change
  		See Endorsement  Premium
  
Earned Premium
  		This amount reflects  exactly how much of the Written Premium has been actually consumed on  providing the insurance coverage.  It is calculated by prorating the  number of days a policy has been active by the total number of days in its  full-term.  For example, an annual policy of $1,200 that has been  in-force for 91 days has an Earned Premium of $300. [(91/365)*1200=300]
  		Used to calculate  premiums used on an accrual basis.  Policy changes and cancellations  generate Earned Premiums.
  		Yes
  		On  Cancellation
  		Policy Header &  Accounting
  
Unearned Premium
  		The opposite of  Earned Premiums in that it is the portion of the premium that has yet to be  used by the policy.  In the above example, the Unearned Premium would be  $900. [(274/365)*1200=900]
  		Used to calculate  unused premiums on an accrual basis.  Policy changes and cancellations  generate Unearned Premiums.
  		Yes
  		On  cancellation
  		Policy Header &  Accounting
  
Full-Term Premium
  		The amount of  Written Premium a company would charge for an entire full-term of the policy,  if the entire policy term were re-issued today.
  		Used to forecast how  much the Written Premium would be in the future
  		Yes
  		On  policy change & renewal
  		Policy Header
  
Annualized Invoice or Billing Premium
  		Annualized Invoiced  or Billing Premium is used in calculating an agency’s Book of Business.   It is a calculation that prorates Invoiced or Billing Premium for policies  where the full-term is anything any than 365 days in length.  For  example, if a six-month automobile policy were invoiced for $600, its  resulting Annualized Invoiced Premium would be $1,200.
  		Used to forecast how  much premium would be billed for a policy with a term other than 1 calendar  year.
  		No
  		No
  		Not Stored
  
Annualized Full-Term Premiums
  		Annualized Full-Term  Premium used in calculating an agency’s Book of Business.  It is a  calculation that prorates the Full-Term Premium for policies where the  full-term is anything any than 365 days in length.  For example, if a  six-month automobile policy were invoiced for $600, its resulting Annualized  Invoiced Premium would be $1,200.
  		Used to forecast the  full-tem premiums for policies whose terms are anything other than 1 calendar  year.
  		Yes
  		Yes
  		Policy Header, Book  of Business Report