If a monthly premium policy is cancelled during the cooling off period (date of receipt of first premium plus 30 days), the commission and the withholding tax on the commission is recovered. It is not possible to do this in the Commission batch job as it will require a special calculation in addition to the commission calculation.
Therefore a calculation must be configured in the Surrender benefit package that will reverse the commission amount.
In the case of an annual premium policy, the commission is recovered if the policy is cancelled after the cooling off period for the portion of the unexpired portion of the annual premium.
In the case of a death claim for an annual premium paying policy, the future premiums i.e. premiums paid for the year following the death of the policyholder, are refunded and the levies (Policy Compensation Fund Levy and Insurance Premium Levy) recovered. In these cases the commission must also be reversed.
The following values have been added to the UDPV Object of CALCULATION METHOD:
· COMMISSION
· FV COMMISSION
COMMISSION
Where the COMMISSION Calculation Method is used, the system will retrieve the MEM COMM BT’s in the Member’s CONTRIBUTION account with an Income Type equal to the Income Type on the Scale linked to the Benefit Product and a Due Date less than the Date of Exit.
FV COMMISSION
Where the COMMISSION Calculation Method is used, the system will retrieve the MEM COMM BT’s in the Member’s CONTRIBUTION account with an Income Type equal to the Income Type on the Scale linked to the Benefit Product and a Due Date greater than the Date of Exit.
Accounting Activity Association Sub-Process
The following value has been added to the UDPV Object BULK SUBPROCESS:
· COMMISSION REV
The following Accounting Activity must be created:
|
BENEFIT PAYMENT |
MEMCOMMREV |
MEMBER |
DR |
MEM DEPOSIT |
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|
|
|
CR |
CONTRIBUTION |
|
|
|
FUND |
DR |
COMMPAYABLE |
|
|
|
|
CR |
COMMISSION |
|
BENEFIT PAYMENT |
MEMCOMMREVRV |
MEMBER |
DR |
CONTRIBUTION |
|
|
|
|
CR |
MEM DEPOSIT |
|
|
|
FUND |
DR |
COMMISSION |
|
|
|
|
CR |
COMMPAYABLE |
An Accounting Activity Association with a Bulk Purpose Type of BENEFIT PAYMENT and a Sub Process of COMMISSION REV must be set up and linked to the following Accounting Activity:
· BENEFIT PAYMENT MEMCOMMREV
The MEMCOMMREV Accounting Activity must be linked to the Accounting Activity association with a Bulk Purpose Type of COMM REPORT.
An Accounting Activity Association with a Bulk Purpose Type of BEN CANCELATION and a Sub Process of BENEFIT PAID must be set up and linked to the following Accounting Activity:
· BENEFIT PAYMENT MEMCOMMREVRV
The MEMCOMMREVRV Accounting Activity must be linked to the Accounting Activity association with a Bulk Purpose Type of COMM REPORT.