Third Party - Billing and Payment Procedures

Third Party - Billing and Payment Procedures

Third Party - Billing and Payment Procedures

 

Term

Definition

Actual Release Date

The actual date invoice is printed or file is sent to Credit Card processor (Paymentech) bank or client for processing

Base Premium

Portion of bill amount that relates to the premium. Excludes options, fees and sales tax

Billing Mechanism

Billing mechanism used to receive payment e.g. Invoice, Credit Card processor (Paymentech), mortgage. This will no longer be displayed on the user interface.

Billing Terms

Includes billing mechanism e.g. Invoice, Credit Card processor (Paymentech) and Payment Schedule e.g. paid monthly, in 3 installments etc. by Client, Cell Code, and Industry.

Cancellation Date

Prior to the expiration date, the date the coverage is discontinued

Client Bill Date

Date client is instructed to start billing.

Deferred Billing

When billing is deferred/delayed, generally occurs for mortgage customers. (Bills are due after effective date)

Due Date

The date payment is due

Effective Date

The date the contract became effective

Enrollment Date

The date the contract was sold

Expected Release Date

The expected date the bill will be printed and sent to client or charged from the financial institution. Calculated based on billing mechanism and due date

Expiration Date

The date the contract expires

External Client Bill

Each Client has a different schedule for starting billing.  The client must have an external reference number.  If the reference number provided is not the number required for billing, then the contract would go through the “bounce” process (decrypting process for clients with strict privacy rules).

Installment Paid Date

Date Full amount billed is posted.

Past Due

Amount Any balance outstanding from previous bills at the time a bill is processed.

Payment Method

Method used to pay for product e.g. credit card or ACH

Payment Schedule

Describes the frequency for payments e.g. Monthly, 3 installments, full pay and whether fees are included

Send to Interface

Indicates if the bill has to be processed to send record to mortgage company (printed, sent to processor or client)

 

When a customer is billed for products through their mortgage company, it could take 30-45 days after the effective date before the charge appears on their mortgage statement. 
The money is distributed from the mortgage company and received by Cinch approximately 
90-120 days after the effective date.  

The following is the billing process for mortgage companies:

  1. Cinch sends a billing file to the mortgage company that includes any new customer who enrolled during the past seven days (or in the case of monthly files, everyone who enrolled during the past month).  The frequency of the billing file is sent based on the client.  This file instructs the mortgage company to begin billing the customers and continue billing without further notice each month until Cinch instructs them to stop at the time of cancellation or expiration of the contract.  The billing record is sent only one time, unlike credit card or ACH, which are sent monthly.

  1. Mortgage payments are traditionally due the first of each month.  The billing record requests the mortgage company begin to bill on the first of the month regardless of the effective date of the contract. 

  1. Various regulations require that the customer has sufficient notice that the mortgage payment is going to change due to the addition of this monthly premium amount.  Required notification is usually 15-30 days in advance.  

Example of a payment change to mortgage statement:

 

Before

After

Principal and Interest   

$850.00  

$850.00

Escrow (taxes and insurance)  

$225.00

$225.00

TotalProtect* premium  

N/A

$37.95

Total Payment 

$1,075.00

$1,112.95

  1. When the customer makes a payment this month, it triggers a statement for the following month’s payment. 

  1. The premium is added to the monthly mortgage payment prior to month end, so that when the customer makes the mortgage payment for the following month, the new billing statement will reflect the increased payment.
  1. Mortgage companies collect the premium from all their customers who have a Cinch product for an entire month and remit the entire month’s collection to Cinch early the following month.  (Residuals are based on each mortgage company)  

 Some mortgage customers pay their mortgage payments a little before the beginning of the month.  To ensure that the premium is added to these customers’ mortgage statements, the billing date is moved one month later, somewhere around the 25th of each month.  The 25th would be called the cutoff date.  Below is an illustration.

*This cutoff change delays the premium by one additional month.*

Example of premium first monthly due date if the customer enrolls in January:

 

Billing Due Date

Enrolls before the 25th of January

March 1

Enrolls after the 25th of January

April 1

 

Assumptions:  Files are sent to the mortgage company weekly (Thursday).  The cutoff for determining the payment due month is the 25th of each month. 

 

 Sending Files to Client for Mortgage Billing

Validates customer wants to keep warranty billing the new loan number?

Customer want to change to DB?

Don’t want the warranty any longer. 

Rep selects Yes to send on Add file

Rep selects No to send on a cancel file.

Rep selects No to send on a cancel file.

Feedback is reported back to Neil on the worksheet.

Feedback is reported back to Neil on the worksheet.

Feedback is reported back to Neil on the worksheet.

 

 

Payment History and Calculation Installments

Payment History and Calculation Installments tabs are located in the Payment button.  These tabs are used for viewing purposes only, and they allow the user to view the history of any payment transactions.  Transactions are displayed with a breakdown of monthly, 3 month installments and annual payments.

To view payment transaction(s), click on Payment History, located on the bottom of the screen.

To view calculated installment payments, click on the Calculate Installments button, located at the bottom of the screen. The Calculate Installments button is for viewing purposes only, it does not initiate payment.




Payment Definitions

Batch Payments Pending

Payment is pending due to the batch not being closed.  These are manually processed by associates.  Once the batch is closed, payment will post on Payment History.

Payment History

A payment that has been manually processed in a batch, by an associate.  It also provides details of the payment, such as, dates, batch type maker, etc.

Interface Payments Pending

Payment that is pending to be sent to a processor, for example, ACH, DDA.  This file is sent by IT to be processed.

Interface Transaction Received

Payment is no longer pending, is posted here after the being processed by the processor.




Processor is the company that Cinch sends payment (credit card/ACH) files to.  The processing company sorts the files, then sends the file to the prospective banks for collection.

Interface Payments Pending

 

Click OK to save (upon renewal, the payment method will remain the same as the previous year.  Only certain accounts, mainly Cinch enrollments, will the billing method default to mailed invoice).

 







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