Insurance In Evergreen/IPR
(Doc ID 2229208.1)
Last updated on FEBRUARY 02, 2017
Applies to:Oracle Lease and Finance Management - Version 12.2.5 and later
Information in this document applies to any platform.
This note describes the impacts to the existing application as the result of enhancement provided in Delta 3 patch that allows users to:
- Bill insurance in Evergreen/IPR
A lessor’s customers often need the ability to continue insurance coverage on their equipment beyond the base-term of the contract. When a contract reaches the end of its base term and the customer plans to continue using the equipment, the contract may enter into an indefinite period renewal. Provide ability for the insurance policy to continue beyond the base-term, so that the there is no lapse in insurance coverage for the equipment/asset.
There are two types of insurance coverage available:
- The lessee may have their own insurance policy, which the lessor accepts as coverage. These Third Party Policies are recorded so that the lessor does not place a sell-through policy (ie, “lease insurance policy”).
- The lessee may not have their own insurance policy, so the lessor will sell the lessee a policy (either voluntarily or by force placing the policy) and pay an insurance provider for the policy. This is known as “lease insurance policy”. All lease insurance policies currently expire at the end of the base term.
When the contract enters into the IPR period, insurance coverage must continue. This can be accomplished by one of the following:
1. The existing lease insurance policy is extend into the IPR period and each billed IPR period includes an amount for the lease insurance policy. The current rates are used to calculate the premium amount.
2. If the lessee has provided proof of third party insurance, the effectivity end date is evaluated during each IPR period to insure there is coverage. If not, a forced place lease insurance policy will be added to the contract and billed.
Usability Issues –
• Insurance coverage is not supported in Indefinite period renewal (IPR)
The scope of the planned enhancement includes the following:
• If the last base term bill period is covered by lease policy, extend lease policy period by period for IPR. Derive insurance premium based on asset original cost/capital cost and prevailing insurance rates. Billing of insurance premium gets discontinued in IPR if third party insurance is provided for the period. After expiration of TPI, user has to create manual lease policy for period immediate after TPI expiration to continue billing from next period onwards.
• If the last base term bill period is covered by TPI, user has to create manual lease policy for at least one period in IPR to continue billing from next periods onward.
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