Handle Deduction Conditions

Click the Deductions Conditions button to see the Deduction Conditions window, where conditions for items to be deducted from the premium are defined. The Deduction Conditions window is used to show deduction conditions for a business for:

• Offer or quote request evaluation, and
• Accounting

General Method of Entering Deductions #

| Remember: If it is not the first time you open the window, you have to click the Edit Menu button to make changes. | The Deduction Conditions window is divided into four section s: Commission Conditions, Brokerage Conditions, Other Deduction Conditions, and Total Deductions. Commission conditions refer to the percentage or amount of premium paid by the reinsurer to compensate the cedent for the acquisition costs and overhead expenses related to the ceded business. Brokerage conditions refer to the compensation that the reinsurer pays to a reinsurance intermediary. Brokerage conditions are set when the business partner details are entered. |

Note! What you see in the Deduction Conditions window depends on the Type of Business, Main Class of Business, and Level of Business.

When you click the Edit Menu button for Commission, Brokerage, or Other Deductions conditions, you can select Edit or New (depending on whether or not you have input data for that condition already). Once in the Edit mode, you can add/modify information in the following fields:

Type: Here you can specify the deduction type. When you select New from the Edit Menu button, and then select Add to add the conditions, you see a window called Select Available Deductions, from which you can select deduction types. What appears in this window depends on the parent/child relationship for the Type of Business, Main Class of Business, and Level of Business.

Calculation Method: The default method is percent or amount. If you select another method (like Sliding Scale, Stepped Sliding Scale, Original, Original + Amount, or Original + Percent, you must select it from the drop-down list (while in Edit mode) in this field. If Sliding Scale or Stepped Sliding Scale is selected, then you see a new window where you can input more details. Refer to Sliding Scale and Stepped Sliding Scale explained later in this chapter.

Amount: If the deductions are reported in amounts (not percentages), you can add the amount in this field.

Currency: If the deductions are reported in amounts, you can specify that currency here.

Comment: This is a free-text field where you can type in any comments you have related to the condition.

Total Deductions #

At the bottom of the Deduction Conditions window on Fac and Direct Business, you can see the total deductions figures. If you make changes to any other part of the window, the total deductions are recalculated. Total deductions are reported as either a percentage of the total gross premium or as an amount (based on the total gross premium). (This is regardless of what you selected in the Basis column.) For multi-currency Flat Premium, the system uses a settled exchange rate and converts the amount into the main currency before adding it to the Total Deduction.

100% Amount: The amount from the total gross premium.

Our Share: The percentage (out of 100%) of what you have specified in Share Conditions.

Percent: This figure shows 100% of the commission.

Enter Deductions as Percent #

Register a deduction value as a percent of something, e.g. the premium.

1. Open your business and click the Deduction Condition (D) button in the Navigation bar.
2. Select Edit or New from the Menu button next to the deduction condition (commission, brokerage or others) you want to enter.
3. If required, select Add from the pop-up menu in the Type field. The system shows you the (remaining) available deduction items.
4. Select the required item(s) in the Select Available Deduction Types list. If you want to select multiple items, hold down the CTRL-button on you keyboard and select the items you want to add.
5. Click Save
6. Click on the Percent field for the selected deduction type. Percent is defaulted in the Deduction Method field
7. Deduction Basis is defaulted, but you can change the value by selecting another value.
8. Enter a percentage in the Percent field.
9. Click OK.

Enter Sliding Scale Commission #

Register commission when the commission is based on the loss ratio of the
business.

1. Open your business and click the Deduction condition (D) button in the Navigation bar
2. Select Edit or New from the Menu button next to the Commission condition.
3. If required, select Add from the pop-up menu in the Type field and select Commission.
4. Select Sliding Scale from the drop-down list in the deduction method field
5. Highlight Commission and then select Sliding Scale from the pop-up menu.
   SICS opens the Sliding Scale Commission window.
6. Enter the Loss Ratio Definition details.
7. If required, enter the Sliding Commission/ Loss Ratio details and click the Calculate Slopes button.
8. If required, enter Calculation Frequency, Losses Carried Forward, Provisional Commission and Average Basis details.
9. Click Save
10. Click OK to save the deduction conditions

Enter Stepped Sliding Scale Commission #

Stepped sliding scales refer to commission where the commission rates are given in steps for each interval of loss ratio. When you select Stepped Sliding Scale from the Commission Calculation Method drop-down list, click the Percent column and select Stepped Sliding Scale from the pop-up list, you see the first Stepped Sliding Scale window.

Here you can view and edit information about stepped sliding scales. The window has two tabs. The first tab, Commission Conditions, is like the Sliding Scale window, explained earlier. The other tab is the Stepped Sliding Scale tab.

Click the Edit button to switch from View mode to Edit mode. You see a new window, which looks like this:

You can enter information directly into the Stepped Sliding Scale section on the left-hand side of the window, or you can have SICS calculate interval rates for you. On the right-hand side of the window, in the section called Specification for Adding Steps, you can do the following:

• Enter Maximum Loss Ratio, and Minimum Loss Ratio.
• In the Step field below the loss ratios, enter the size of the steps between each loss ratio within the given interval.
• Enter the Commission percent for Maximum Loss Ratio and commission for Minimum Loss Ratio.
• Click the Add steps button.

You see the calculated information appear in a table on the left-hand side of the window. A number appears in the Step field beneath the commission fields that indicates the size of the steps between the commission percentages.

When you click Save, you return to the Stepped Sliding Scale tab, where you see the information that was just generated.

Upload Stepped Sliding Scale Commission table #

Import Stepped Sliding Scale Commission table from external spreadsheet files.

1. Open your business and click the Deduction condition (D) button in the Navigation bar
2. Select Edit or New from the Menu button next to the Commission condition.
3. If required, select Add from the pop-up menu in the Type field and select Commission.
4. Select Stepped Sliding Scale from the drop-down list in the deduction method field
5. Highlight Commission and then select Stepped Sliding Scale from the pop-up menu.
6. Select Stepped Sliding Scale folder and go to edit mode
7. In the Stepped Sliding Scale container, select Import Table from popup menu.
8. For the File to Import, select the Find button.
9. Navigate to the wanted folder, select the file and Open.
10. Select the Import button.
11. If the process passes the validations, a small dialogue box appears with the number of details found.
12. Select the OK button. The values from the file are loaded and shown in an edit window
13. You can manually change some values if needed.
14. Select Finish.

If the process fails the validations, an Error List appears. This problem must be solved before the spreadsheet can be imported.