Creating checks

Payments

Within the context of ClaimCenter, a payment transaction (often referred to simply as a payment) is a monetary amount that is paid to satisfy a claim.

Every payment transaction is associated with exactly one reserve line from one exposure, though a reserve line can be associated with multiple payment transactions. For example, suppose that Allen Robertson files a claim because he hit both his neighbor's car and his neighbor's fence. The claim has an exposure with one reserve line. To satisfy this claim, ClaimCenter creates two payment transactions associated with the reserve line: one $1200 payment for the damage to the car and one $600 payment for the damage to the fence.

At the level of a payment, there are no details as to who will be paid or how. For example, from the payments alone, you cannot say who the payee is, if the payments are made at the same time or a month apart, or if they are made with a physical check or an electronic transfer.

Checks

A check is a group of one or more payments to be sent to a single recipient. In addition to payment-level information (such as amount and reserve line), a check includes information about who the payments are made to and how.

Consider the previous example of Allen Robertson's claim. There are two payments: a $1200 payment for the damage to the car and a $600 payment for the damage to the fence. The payments could be grouped into a single check for $1800 made payable to the neighbor whose car and fence were damaged, or two separate checks for $1200 and $600 respectively made payable to the auto repair shop and fence contractor. For each check, the check could be issued as a physical check or as an electronic funds transfer.

The reserves from a reserve line can provide money for one or more checks, and a check's money can come from the reserves of one or more reserve lines. The following is a list of claim examples showing how the reserves from one or more reserve lines and be associated with one or more checks.

• Example: Multiple reserves and one check
  • Description of loss: Ray Newton hit a tree. His car was damaged, and he suffered a broken arm.
  • Exposures: The claim has two exposures. The first is tied to his collision coverage. The second is tied to his medical payments coverage. Each exposure has one reserve line.
  • Payments: One payment for $2000 associated with the collision reserve line. One payment for $1715 associated with the medical payments reserve line.
  • Checks: Ray receives a single $3715 check. This check includes both payments.
• Example: One reserve and multiple checks
  • Description of loss: Ray Newton was involved in an auto collision which involved damage to his vehicle and a doctor's exam.
  • Exposures: One exposure tied to his collision coverage. The exposure has one reserve line.
  • Payments: One payment for $2000 associated with the collision reserve line (for the vehicle damage). One payment for $500 associated with the collision reserve line (for the medical exam).
  • Checks: The auto repair shop receives a $2000 check to repair the vehicle damage. The doctor receives a $500 check for the medical exam.

Every check has at least one payee. A payee is a person or organization to whom a check is made payable. Payees can be either claimants or vendors who provided services for the claim (such as auto repair shops, doctors, or lawyers).

Check sets

Financial transactions require approval. In some cases, the transaction is sufficiently small and does not meet any special criteria, and therefore the transaction is automatically approved. In other cases, the amount is large enough that it exceeds the creator's authority limit, or the transaction meets certain criteria specified in transaction approval rules. In these cases, the transaction must be approved by another user.

For a given claim, when multiple payment transactions are created at the same time, they ought to be approved as a unit. (Either all transactions are approved or none of them are approved.) To facilitate this behavior, payment transactions are grouped into check sets. A check set is a set of one or more checks (and their associated payment transactions) submitted for approval as a unit.

Approval is executed through the use of approval activities. For more information on the business functionality of approval, see the Application Guide. For more information on activities in Cloud API, see Activities. When the check set is submitted through Cloud API, the user whose authority limits are checked is the session user. (For more information on how the session user is determined, see the Cloud API Developer Guide.)