Can Your Payment Platform Execute on THESE Insurance Business Rules?
In a recent post, we covered how important it is to find a Payment Services partner who’s not just an expert in payments, but in the business of insurance, too. There are so many transactional scenarios in our industry that require specific business rules that can be configured to knife-sharp precision. In insurance, one size does not fit all.
Today, let’s look at a case study that proves the point.
Imagine This …
Let’s say you’re an MGA that writes in 38 states with multiple affiliated carriers. You’ve decided to bite the bullet: it’s time to add payment processing to your service suite.
Specifically, you want to be able to process credit card and electronic check transactions that are initiated in a variety of ways: at point-of-sale (POS), through an agent, online, or by telephone with an interactive voice response (IVR) system.
In addition to facilitating these transaction types, your payment services system has to do so in a way that aligns with your business rules and processes.
- Each of your carriers and programs sets its own business rules for things like cancellations, reinstatements, late payments and renewals.
- You do not charge any convenience fees for POS or down payments.
- You do, however, add a convenience fee ($2.95) for installment payments.
- Recurring payments must be charged each day for the amount shown on the invoice.
- Each carrier you serve must have funds deposited into its own premium bank account.
- All of your payments must be reconciled through a single merchant account.
- You do not store any card data in your database, in compliance with PCI security requirements.
It’s Not Fiction
The scenario above isn’t imaginary. It’s a description of one of our customers. With our payment services system, we were able to check every box on this insurer’s list of requirements, allowing a single merchant account to settle through their settlement agent services and split the single daily deposit into multiple deposits for the insurer.
Here’s how it works.
Each day, funds are settled against the merchant account and reconciled (to the penny) for each of the insurer’s carriers and programs, with all discrepancies cleared. Settlement reports are emailed daily.
When a payment is made, policies are credited in real time. All business rules are implemented in real time, too.
All electronic payments – whether initiated by phone or Internet – are managed through a single interface, where the insurer can access, void, correct, or credit any payment at any time. Moreover, the system is completely integrated with the customer’s insurance automation software, which fulfills all of its reconciliation and settlement requirements.
For all of the above, strong data security is in place to protect sensitive information. Cardholder data is securely collected and stored in a PCI-DSS compliant card store. Later, when processing future or recurring transactions, this sensitive information is replaced with token data, which facilitates the transaction without exposing the cardholder to risk of theft.
Ready for the good part? This company, which processes about $10.5 million in credit card payments per year, was able to save $159,000 in merchant fees with just 100,000 card payments. They did so while sharpening their competitive edge and elevating the services they offer to a much higher level.