Feature #192
Updated by Dheeraj Kumar about 2 months ago
The business logic is similar in all respects to the AP with the following exception. This transaction REDUCES the REMAINING LOAN and is NOT refundable by the FINANCE COMPANY. The client is usually refunded by their broker (who typically applies the refund credit when the client renews their policy.
FCIF Updated Calculation for Reduced Premium – Both principal & interest should be adjusted. The scenario below serves as an example:
1.Principal
The calculation is now ((RP+15%)/ # of OS installments)
a.$1200+15%=$1,380 divided by 3
b.$460 for each of the 3 remaining months is SUBTRACTED from the remaining principal amount.
2.INTEREST ON RP
The original interest rate (unless otherwise indicated) is charged to the Reduction premiums
a. Assume the original interest rate was 12.5%
b. The calculation is as follows: -$1,380.00 * 12.5% = -172.50 / # of OS installments (3) or -$57.50 is SUBTRACTED each month from the remaining Interest amount.
**For EPIC**
1. Transaction Code:
a. “ENDA” for Principal Transaction Entries
b. “IPFO” for Interest Transaction Entries
**Narrative that will appear in EPIC: **
After the reduction in premium is applied the changes should be applied to the remaining installments. The changes should clearly show what is being applied for:
The narrative in Epic GL Account should appear as indicated below.
a. RP on 3 of 8 Monthly Installments – (Description for Reduced Premium)
b. RP on 4 of 8 Monthly Installments – (Description for Reduced Premium)