Direct bill payments
A payment is money received from someone outside of the insurer that pays for charges associated with an account.
BillingCenter supports three methods of billing:
- Direct bill - The insurer bills the account that owns the policy. The account pays the insurer directly.
- List bill - The insurer does not bill the account that owns the policy. Rather, the insurer bills a third-party account known as a list bill account. List bill accounts are typically businesses such as mortgage companies that have an interest in ensuring that the policy gets paid. The list bill account pays for the policy and retrieves payment from the owner account on its own, such as through an escrow account.
- Agency bill - The insurer does not bill the account that owns the policy. Rather, the policy's producer bills the owner account. The producer then submits payment to the insurer minus the commission that the producer is entitled to.
For polices that are billed using direct bill or list bill, payments are managed using
the DirectBillMoneyRcvd data model entity. These are referred to as
direct bill payments. They are also sometimes referred to as "direct bill money
receiveds", "DBMRs", or some similar abbreviation.
Broadly speaking, there are two ways that a payment can be made: manually (a "responsive" payment) and automatically.
Manual payments (responsive payments)
In some situations, BillingCenter sends an invoice to the payer and expects the payer to manually respond with a direct bill payment. This occurs when the account's payment instrument is set to Responsive. Thus, these are sometimes referred to as "responsive payments".
When the payer submits the direct bill payment, the payment also has a payment instrument. The payment instrument for the payment is not set to Responsive. Rather, it is set to a value that indicates the manner in which the payment was provided. This must be cash, check, or a non-universal payment instrument owned by the account (such as a credit card).
Every direct bill payment must target a specific account. It can also target a specific policy or invoice owned by that account.
Automatic payments
In other situations, BillingCenter sends an invoice to the payer, but it does not expect the payer to manually respond. Instead, BillingCenter automatically deducts payment from one of the account's payment instruments (such as a specific credit card or bank account). This occurs when the account's payment instrument is set to any value other than Responsive. These are sometimes referred to as "automatic payments".
In this situation, BillingCenter creates a payment request when the invoice is billed. Payment requests are objects that manage the withdrawal of funds from the associated credit card or bank account. Payment requests can also be created manually.
When the funds are withdrawn, the payment request creates a direct bill payment. This payment has a payment instrument, and it is set to the account's payment instrument. (In other words, the payment's payment instrument identifies which account payment instrument was used as the source of the payment.)
Payment support in Cloud API
This topic discusses how you can work with direct bill payments and payment requests through Cloud API.
For more information on direct bill payments or payment requests, see the Application Guide.