12.2.5+ Delta 4.1 - Insurance Enhancement (Doc ID 2265944.1)

Last updated on SEPTEMBER 27, 2021

Applies to:

Purpose

 This note provides a description of Insurance Enhancement features introduced in OLFM as of the 12.2.5+ Delta 4.1 patch.

• Ability to automatically apply credit memo to open unpaid invoices after insurance policy is cancelled

Scope

 Business Background

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.
Some companies have identified certain criteria’s that are not insurable by creating insurance exclusions or insurance restrictions. There are additional types of exclusions that should not be included during the force place insurance evaluation, and customers want the ability to extend the exclusions beyond what is currently available.
Additionally, there are costs or fees that customers my want to include as part of the insurance premium.

Details

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