Overview
This demonstrates how to set up the rate tables, discount tables, and remittances for complex Florida rates. This is meant as a guide only, as rates may change.
Create the Basic Rate Table
Admin/Title Premiums/Rate Types/Add
Add or modify an existing rate table. This can be a separate rate table if Florida is the only state where this underwriter will be used, or the rates can be added to an existing table by changing the state to Florida for these specific rates.
- Select Florida as the State.
- Set the Minimum Rate and Loan Rounding Amount to $100.00.
- Check Rate Tiers are Additive.
- Enter the rate tiers by using the Add button.
- Click Save.
Create a Simultaneous Rate Table
Admin/Title Premiums/Rate Types/Add
Typically, there are different rates charged for the lender’s policy when it is issued simultaneously with the owner’s policy, compared to when it’s created as a stand-alone policy.
The simultaneous rate needs two conditions: Sales >= Loan and Sales < Loan. Conditions allow different rates to be set based on a comparison between the sales price and the loan amount. To utilize conditions in this case:
- Select the None Condition and click Edit.
- Select Sales >=Loan in the Sales vs Loan dropdown.
- Save.
- Add another condition.
- Select Sales < Loan in the Saves vs Loan dropdown.
- Click Save.
Sales >= Loan condition:
- Add a flat rate amount of $150.
Sales < Loan condition:
- Set a Rate Base of $150.
- Set the Based On to Calculated Difference.
- Check Rate Tiers are Additive.
- Add the rate tiers from the basic rate table.
- Click Save.
Notice for the scenario where the sales price is greater than the loan amount, the rate is set at a flat rate of $150.00. However, if the sales price is less than the loan amount, it will use a “per thousand” calculation. For example: if the sales price is $90,000 and the loan amount is $105,000, then the lender’s policy will be calculated as ($100 x 5.75 = $575.00) plus ($5 x $5.00 = $25.00) for a total of $600.00 and the owner’s policy would be calculated as $90 x $5.75 = $517.50. The difference would be ($600.00 – $517.57 = $82.50) plus the base of $150.00 for a total premium of $232.50.
Create a Remittance Split Table
Admin/Title Premiums/Rate Types/Add
In Florida, remittances are based on a tiered rate percentage, like the table below. These numbers were determined by multiplying the basic rate by the remit percentage for each tier (e.g. $5.75 x 30% = $1.725 and $2.50 x 35% = $.875)
- Set the Loan Rounding Amount to $100.
- Check Rate Tiers are Additive.
- Add the rates.
- Click Save.
Create a Table to Use to Calculate the Discount Rates
Admin/Title Premiums/Rate Types/Add
Discount rates in Florida are based on a rate table, like the table below. This table will be used when discount rates are calculated.
- Set the Minimum Rate to $100.00.
- Check Rate Tiers are Additive.
- Add the rate tiers for the discount rate.
- Click Save.
Create a Remittance Split Table for Discount Rates
Admin/Title Premiums/Rates Types/Add
Since remittances can also be discounted based on discount scenarios provided by the underwriter, the table below is needed to calculate the remittance discount. These numbers were determined by multiplying the discount rate by the remit percentage for each tier (e.g. $3.00 x 30% = $.99)
- Check Rate Tiers are Additive.
- Add the rate tiers.
- Click Save.
Create the Discount Rate
Admin/Title Premiums/Discount Rate Types/Add
To set up discount rates for Florida, two entries will need to be created, based on the relationship between the insurance amounts on the prior and new policies, and each will be pointed at the tables created above.
Prior <= New criteria
- Add a discount rate.
- Set Prior vs New to Prior <= New.
- Set the Time Frame to 0 months to 36 months.
- Add a rate calculation.
- Set the Method to Add.
- Set the Percentage to 100%.
- Select the Prior Calculated Rate radio button and the discount rate created above in the dropdown.
- Save.
- Add another rate calculation.
- Set the Method to Add.
- Set the Percentage to 100%.
- Select the Excess radio button and the basic rate created above in the dropdown.
- Click Save.
Prior > New criteria
- Add a discount rate.
- Set Prior vs New to Prior > New.
- Set the Time Frame to 0 months to 36 months.
- Add a rate calculation.
- Set the Method to Add.
- Set the Percentage to 100%.
- Select the Lesser of Prior & Basic Rate radio button and the discount rate created above in the dropdown.
- Click Save.
Notice that there are two scenarios and distinct rate calculations. In the first scenario, the premium is calculated using the calculations defined when the prior policy amount being less than or equal to the new policy criteria is met. The rate will be calculated at 100% of the discount rate table that was set up earlier and the excess (the difference between the prior policy amount and the new policy amount) will be calculated on the normal basic rate. In the second scenario, the premium is calculated using the calculations defined when the prior policy amount being greater than or equal to the new policy amount criteria is met. Only the lesser of the two policy amounts will be calculated using the discount rate table.
Create the Remit Discounts
Admin/Title Premiums/Discount Rate Types/Add
In order to set up remit discounts, a new discount rate type will need to be created. The remit discount will be set up similarly to the discount rate, with two entries based on the relationship between the insurance amounts on the prior and new policies.
Prior <= New criteria
- Add a discount remittance rate.
- Set Prior vs New to Prior <= New.
- Set the Time Frame to 0 months to 36 months.
- Add a rate calculation.
- Set the Method to Add.
- Set the Percentage to 100%.
- Select the Prior Calculated Rate radio button and the discount remittance rate created above in the dropdown.
- Save.
- Add another rate calculation.
- Set the Method to Add.
- Set the Percentage to 100%.
- Select the Excess radio button and the full remittance rate created above in the drop-down.
- Click Save.
Prior > New criteria
- Add a discount rate.
- Set Prior vs New to Prior > New.
- Set the Time Frame to 0 months to 36 months.
- Add a rate calculation.
- Set the Method to Add.
- Set the Percentage to 100%.
- Select the Lesser of Prior & Basic Rate radio button and the discount remittance rate created above in the dropdown.
- Click Save.
Link the Remit Table and Remit Discount to the Underwriter
Admin/Partners/Edit an underwriter/Underwriter/State-Based
In order for the underwriter to use the remit table and the remit discounts that were created above, the tables have to be linked to the underwriter.
- Search for an underwriter, select it, and click Edit.
- Click the Underwriter button.
- Click Add in the Remittances area.
- Select the remit table created above as the Rate Table and set the Percentage to 100%.
- Select the discount remit table created above as the Discount Rate Table and set the Percentage to 100%.
- The Based On Consideration should be set to Default.
- Click Save.
Link the Rate Tables to the Underwriter
Admin/Partners/Edit an underwriter/Underwriter/Title Premium Rates
In order for the rates that were created to appear automatically for the title premiums on the HUD or CD, the tables have to be linked to the underwriter.
- Search for an underwriter, select it, and click Edit.
- Click the Underwriter button.
- Go to the Title Premium Rates tab.
- Select a Transaction Type and set the rates.
Understanding the Calculations
Examples #1: Prior Loan Policy and Loan Amount < Sales Price
Sales price = $150,000 Loan = $140,000 Prior = $85,000 (entered on LP within date range)
OP = $825.00 Remit = $247.50
LP = $566.75 Remit = $170.03
Example 2: Prior Owner’s Policy and Loan Amount < Sales Price
Sales price = $150,000 Loan = $140,000 Prior = $85,000 (entered on OP within date range)
OP = $616.75 Remit = 185.03
LP = $150 (simo rate) Remit = *based on simultaneous underwriter remittance*
Example 3: No Prior Policy and Loan Amount < Sales Price
Sales price = $150,000 Loan = $140,000
OP = $825 Remit = $247.50
LP = $150 (simo rate) Remit = *based on simultaneous underwriter remittance*
Example 4: No Prior Policy and Loan Amount > Sales Price
Sales price = $150,000 Loan = $160,000
OP = $825 Remit = $247.50
LP = $200 (simul rate + ($5.*$10,000=$50)) – The loan amount looks at the 2nd tier to get the rate and then multiplies by $10,000 (the loan amount in excess of the sales price).
NOTE: If the prior policy is entered in the Prior Lender’s Policy field, then the discount table will override the simultaneous rate. Enter the prior policy on the Prior Owner’s Policy to use the calculated simultaneous rate and discount the owner’s premium amount.