AIM Endorsements

Endorsements

An endorsement is a clause in an insurance policy detailing an exemption from or change in coverage. The following steps describe how to process endorsements in AIM. 

NOTE: This process is for all endorsements including Audits.  There is a separate process for Cancellations and Reinstatements. 

The system is comprised of many types of endorsements. The different types and descriptions will populate when you select either of the following; 

The Endorsement Reason window will appear. At this point you can select the endorsement type. Note: Audits have their own reason codes in this section, separate from the various Endorsement codes. Select the applicable option and click OK. 

There are certain endorsement options in the system that are for Binding Authority teams. These option descriptions begin with a prefix of ‘Endorsement’ and actually produce the endorsement document. 

Audit Notables

The audit endorsement effective date must be the policy inception date, so that the premium entered into the Endorsement Premium field does not revert to 0.

Audit Disputes: If the insured is disputing the audit, the audit invoice must be immediately reversed. Any request for installments or extended payment terms should be referred to Premium Accounting Management.

Audits will be returned to the carrier for direct collection after 45 days.  If approved by the carrier, the audit invoices must be immediately reversed.

Endorsement Notables

AP Endorsement – ERP or Policy Extension should be used for processing an extended reporting period endorsement (no change to expiration date) or processing a policy extension (adjusting policy expiration).  A cover letter for the endorsement document is produced.

Monthly Reporting policies have a separate endorsement reason codes, for either Additional or Return Premium. 

Processing an Endorsement

1.  In the Endorsement Reason screen, select the applicable endorsement type. 

2.  Click OK. 

In the Policy Change/Endorsement screen, the policy effective, expiration, written premium and taxable status will be displayed.

3.  On the Premium/Change Description tab, enter a description of the endorsement in the Reason text box. Copy this text to your clipboard for pasting later in the process.

4.  AIM will automatically track the endorsement number in the End # field. Update as necessary to match the endorsement number that you are processing.

You may on occasion need to charge or return fees during the endorsement process. Click the magnifying glass next to Taxable Fees. In the Fee Schedule screen, enter all fees being charged to the retail agent (RTS fees and company fees). In the Reason drop-down list, select the fee being charged. Available fee options will differ, based on approved fees in that state. Enter the amount in the Amount field.  The Charging Party and Paid To fields will default for you. In some cases where RTS or the company will charge the same fee, the fee is listed twice.  In these cases, ‘Carrier’ is listed at the end of the description (i.e. Inspection Fee and Inspection Fee – Carrier). 

NOTE:  There is an option for a split and non-split version for each brokerage fee type.   If the broker/underwriter is sharing fee revenue with another broker/underwriter(s), a ‘split’ brokerage fee type should be used.  The team binding & invoicing has the option to share commission and fees by the same percentage, share commission and fees at a different percentage, share commission but retain the fee, or give all commission to the other broker and retain the fee.

Regardless of the brokerage fee type chosen, enter the total amount of the fee in the Amount field.   The actual percentage split is not entered at the time of quoting, but entered at time of invoicing.    

Taxes On Fees - When the carrier is non-admitted in a given state, you should refer to the applicable State Sheets to understand the taxing status of fees.

State fee controls for any given state have been configured by RSG SL Tax, and the Tax checkbox will be checked or unchecked by default.  These check boxes should be left unaltered.  The check box being checked as Taxed will only APPLY taxes if the Risk Company is Non-Admitted. 

Click OK on the Fee Schedule screen.  

Taxes will be determined the way the policy was bound.  Click the taxes magnifying glass to bring up the Surplus Lines Tax Calculator screen.

If the risk is a single-state, the Surplus Lines Tax Calculator screen appears for the given state.  Each state tax or surcharge is listed individually.   You refer to the applicable State Sheets to understand the taxing status of fees. As a best practice to ensure you have the most up to date tax rates in AIM, click Reset Taxes.  If you have any questions about the calculated taxes, contact Surplus Lines Tax.

If the risk is a multi-state (as indicated with the NRRA Multi-State checkbox in the Submission Entry screen), the Multi-State Tax Allocation screen appears.  Allocate the risk premium, TRIA premium, and any applicable fees over the applicable states and click Calculate.  If necessary, you can click on the magnifying glass on each state allocation.  The single-state Tax Calculator screen is presented.  After referring to the applicable state sheets, review and update if necessary.   As a best practice to ensure you have the most up to date tax rates in AIM, click Reset Taxes.  If you have any questions about the calculated taxes, contact Surplus Lines Tax. Click OK on the single-state Tax Calculator screen.    Click Save on the Multi-State Tax Allocation screen. 

Click OK to close the tax calculator.

In some cases, you will need to select the Policy Detail Change tab.

The Policy Detail Change tab is used most often to make changes to the Policy Number, Policy Term, or Commissions. To update any of the change fields, select the appropriate checkbox above the field and the field will become available for editing. 

1. Change Policy No.: This field allows you to update or amend the insured’s policy number. This is used a majority of the time when you previously bound an account using the submission number as the policy number (because the carrier had shown the policy number as TBD). 
2. Other: This field allows you to update the Minimum Earned Premium or the Aggregate Limits. 
3. Adjust Policy Term: This field allows users to update or adjust policy dates. 
   • Effective – policy inception date

• Time – time at which the policy becomes effective on the policy inception date
• Term – policy term
• Expiration – policy expiration date

1. Extend Policy Term: These drop-downs allow you to extend the policy term by selecting either extending the term of the policy or entering a revised expiration date.
2. Commission Chg: This allows you to update the commission levels on the policy, on a go-forward basis only.  This will NOT affect any invoices processed prior to this update. 
3. Monthly Reporting: If your account is set-up on Monthly Reporting, you can enter or update the Estimated Full Term Premium by using this field. 
4. Escrow Change: This section allows you to make updates to the insured’s escrow information:
   • Escrow – will be checked, indicating Escrow applies to the policy

• Type of Escrow – Indicates how escrow is calculated
• Escrow % – Escrow percentage amount, if applicable
• Current Amount – Current escrow amount, populated automatically
• Revised Amount – Updated escrow amount
• Escrow Change – Difference between the current amount and revised amount, populated automatically
• Line of Credit – Indicates that a Line of Credit is being used
• LOC Amount – Line of Credit amount

Once all information has been entered; select OK.

The document processing window will appear with the endorsement cover letter template. Review this template and update as necessary. 

If the endorsement is not premium bearing or is a direct bill invoice, click Attach, attach the endorsement document, and email to the retail agent.  If the endorsement is premium bearing and an agency bill invoice is to be processed, click Save and click Close.  AIM will provide a prompt asking to invoice the endorsement now. 

Select Yes to process the invoice. 

The reason field defaults based on the invoice process and should not be updated. 

The Description field defaults based on the reason. Enter the endorsement description or use the item saved to your clipboard in this field. This description will display on the Endorsements tab on the Policy Data screen as well as the Accounting views. It also displays in the AIM Accounting module for premium accounting staff.

If a premium finance company has been documented on the policy, it will display. You may enter the contract number if one has been provided. 

The Due Date indicates the date payment is due from the retail agent. For endorsements and audits the field should be deleted, which will then display “DUE UPON RECEIPT” in the due date field on the invoice.

The Market Due Date indicates the date payment is due to the market company and is calculated based on the contract terms with the company. The date should not be edited. This field should be ignored for direct bill transactions.

The Billing Type defaults from the selection on the Issue Binder screen during the binding of the account. You can manually update this section 

• Agency Bill – The premium is billed by us to the retail agent. 
• Direct Bill/Insured Bill – We will invoice premium directly to the insured. (rarely used)
• Direct Bill/Company To Insured – The premium is billed directly to the insured by the market company.

Optionally, select an invoice message from the drop-down list or type a custom message. This message will print as a centered footer on the invoice. 

If there was revenue split between brokers set at the time of binding or updated after binding, select the Production Allocation tab and confirm the split is correct. 

If the policy is set up on installments, please refer to the installment section of this guide for more information. 

Click OK.

The Invoice Screen will appear. In this window, you will verify all premium, fee, and tax information (if applicable) is correct. You can review this from the Detail (AR) tab and/or Detail (AP) tab. If something doesn’t appear to be correct on this screen, select Cancel and follow the endorsement steps again to fix the issue. 

In the Note text box, paste the endorsement reason from your clipboard or enter any desired text. 

Click Post. The invoice document window appears. Print or Export the invoice to your PDF.

Close the invoice window. 

Combine the invoice with the endorsement using the Adobe PDF platform. In the Save As window, select a location on your hard drive to temporarily store the PDF document and Click Save.  

Import the PDF document into the appropriate AIM submission (via the ‘Add’ action on the Attached Files Tab).     

Update the Description and apply the appropriate Folder if needed.   

Email the Endorsement Cover letter, Endorsement, and Invoice to the retail agent via F5 on your keyboard. Update your AIM Activity Note as needed on the Activity Tab.

Version 8, 10/7/2022

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