Overview
The remittance ledger tab is used for a remittance holding account similar to a trust ledger. The remittance ledger can be used for holding an underwriter’s portion of the premium amount in a separate account while keeping this information in the file.
Some states also require companies to charge additional fees, such as CPLs or policy fees (e.g. TIEFF, Florida surcharge) and remit those fees to the underwriter. If this is the case, see the section for Creating a New Settlement Type at the end of this document to add those fees.
Adding a Remittance Ledger
Admin/Accounting/Bank Accounts/Add
- Fill in the information for the remittance bank account.
Admin/Accounting/Ledgers/Add
- Fill in the Name, select a Bank Account from the drop-down and select Remittance for the Ledger Type.
- Set the ledger’s default states and counties as appropriate.
- If there are underwriter-specific remittance bank accounts, only enable the ledger for the appropriate underwriter. If there is only one remittance ledger, leave it set to All.
Adding the Remittance Calculation
Admin/Partners/Edit/Underwriter
- Search for and edit the underwriter partner. Click the Underwriter button in the Partner-Specific Data section.
- Select the State and click the Add button.
- If the remittance calculation should apply to all remittance types not otherwise specified, select the Default radio button.
- If the remittance calculation should apply to a specific type of coverage, select the Coverage radio button and specify the type of coverage in the dropdown menu.
- If the remittance calculation should apply to a specific endorsement, select the Endorsements radio button and specify the endorsement in the dropdown menu.
- If the remittance calculation should apply to a specific settlement type, select the Other radio button and specify the settlement statement line from the dropdown menu.
- If the calculation should be based on a consideration range, enter the range in the From and To boxes in the Consideration area and select the type of consideration on which it should be based.
- Typically this is left blank and set to Default.
- Enter the calculation information in the Calculation section.
- If a flat rate should be remitted, enter the amount in the Flat Rate field.
- If the calculation is based on a dollar per thousand calculation, enter the amount in the Per Thousand field.
- If a percentage of the amount or the whole amount should be remitted to the underwriter, enter the percentage in the Percentage field.
- If the remit amount is based on a different rate table that the premium amount, as is the case in Florida, select the rate table(s) from the Rate Table Percent and Discount Rate Table dropdown menus and enter the percentage of the rate table that should be calculated.
- Click Save.
- Repeat for all the different remittance calculation types that could apply in the selected state, such as premium, endorsements, and settlement types.
Remittance Functionality with the Settlement Ledger
Creating a Remittance Partner & Partner Type
Admin/Partner-Related/Partner Types
- Click Add.
- Name the partner type Remittance or something similar.
- Choose the appropriate options for the partner type.
- Click on Help for details about each option.
- Click Save.
Admin/Partners
- Click New.
- Enter a Company Name. This name should be something that will allow the disbursement to be deposited in the company’s remittance account.
- Click Add in Partner Types and select the Remittance partner type.
- Click Save.
Setting Up Remittance Splits
Admin/Partner-Related/Services Provided
- Click Add.
- Enter a Name. This is used to identify the service and is displayed on the split on the file.
- Click Save.
Admin/Partners/Edit Remittance Partner/Vendor Management
- Click on the Vendor Management tab.
- Click on HUD Fees.
- Select Partner Specific
- Select the Default product and Default state, so the split will be set on all files.
- Highlight a fee that should be remitted to the underwriter and click Edit. These fees include, but are not limited to, endorsements, owner’s coverage, lender’s coverage, CPLs, policy surcharges, and premium tax.
- In the Splits area, click Add.
- Select the appropriate option from the Service Provided drop-down.
- Click Split Include Remittance and remove the check box from Disclose on HUD.
- Click on the Help button for explanations of the other options, as they may or may not be required in certain states.
- Click Save.
Auto-Transferring Funds
Auto-transferring funds from one ledger to another will automatically create a receipt when the funds are disbursed on the receiving ledger/tab for the amount being transferred, which saves a user from having to go to the appropriate tab and manually create a receipt. The funds will still need to be sent, either by check or wire, to the corresponding account at the bank.
To set up an auto-transfer to the Remittance ledger from Settlement, do the following:
Admin/Partners/Edit Remittance Partner
- Under Vendor Management, click Auto-Transfer.
- Select the Office, the settlement ledger in the Ledger dropdown menu, and select the Remittance Ledger radio button.
Note that even with an auto-transfer set up on the remittance partner, the money will still need to be physically moved from the settlement account to the remittance account. The easiest way to do this is to wire the money from the settlement account to the remittance account.
To set up the partner to have their disbursements always wired:
Admin/Partners/Edit Remittance Partner
- Under Company Information, click Default Wire Info.
- Check Default to Wire when Disbursing and Don’t Show Popup when Using “Disburse All.”
- If Don’t Show Popup when Using “Disburse All” is checked, the user will not be asked to verify the wire information when the funds are disbursed. Resware will use the default wire information.
Example on the File
File/Settlement/Postings
- Disburse the item(s) to the remittance partner. This can be done using the Disburse Single or Disburse All button.
- Once disbursed, the payment will show as a pending wire under Accounting/Outgoing Wires/Need to be Reviewed and, if an auto-transfer is set up, it will appear as a deposit on File/Remittance and in Accounting/Deposits for the remittance ledger.
- The payment will show as issued when the wire is marked as issued.
File/Remittance
- If an auto-transfer to the remittance ledger is set up on the remittance partner, a deposit will be automatically created on File/Remittance:
- If an auto-transfer is not set up on the remittance partner, click the New Deposit button.
- Select the Payor and enter the Amount.
- The Received date and Method will default to the current date and Check, respectively.
- Click Save.
Remittance Functionality with the Receivables Ledger
Creating a Remittance Transaction Type
Admin/Accounting/Transaction Types
- Select the receivables ledger from the Ledger drop-down menu.
- Click Add.
- Name the transaction type Remittance or something similar.
- Click Add in the Service Provided Splits area, highlight Remittance, and click Add.
- Check Auto-create Incoming Remittance Wire and Remove from Invoice.
- Select Hold for Remittance as the Partner Type.
- Click Save.
Example on a File
File/Receivables
- Click on the Get Fees from Settlement button.
- Click Yes to add all settlement fees assigned to transaction types for this ledger.
- Select appropriate party to invoice.
- Ensure all applicable fees are selected.
- Click Save.
NOTE: Fees will populate based on rates set. At first glance it will look as though fees are being overcharged, however, this is not the case. The remittance to the underwriter is a split out portion of the premium owed to the underwriter and creating an invoice will remove these fees from Receivables.
- Highlight all fees and click on Create Invoice from Selected.
- An invoice will populate in the Report Viewer and will no longer show the remittance fees. Creating an invoice also moves the remittance fees from Receivables to Remittance.
Remittance Export
Accounting/Remittance/Remittance Export
- Select the Underwriter, State(s), and appropriate date(s).
- Click Preview Export or Create Export.
- If there are any potential problems found, the issue and the file that has the issue will be displayed.
- The following items are verified:
- That there is a remittance ledger assigned on the file.
- That there is a positive balance on the file’s remittance ledger.
- That the balance on the remittance ledger is equal to or greater than the remit amount.
- To fix these files before generating a report, make note of the file numbers and click No. Selecting No will cancel the remittance reporting process.
- If Yes is clicked to the “Continue?” prompt or if there are no problems found, Resware will ask to disburse the remittance items as checks.
- Choosing No when asked to disburse the remittance items as checks will prevent Resware from automatically generating pending disbursements on the Remittance ledger. There is still the ability to disburse from this ledger, but it will have to be disbursed manually out of each file.
- Choosing Yes will prompt the system to create a pending disbursement for the remittance amount on each of the files on the report that has a remittance ledger assigned.
- The system will notify how many items will be disbursing.
- Choosing Yes will result in a pending check for the file’s remittance amount to be created on the remittance tab.
- Choosing No will ask if to continue to create the batch without auto-disbursing.
- Choosing Yes will create the batch but will prevent Resware from automatically generated pending disbursements on the remittance ledger. There is still the ability to disburse from this ledger, but it will have to be manually disbursed out of each file.
- Choosing No will cancel the remittance export process.
File/Remittance
- If yes is responded to all the of the prompts, the system will have auto-generated a pending disbursement on the remittance tab of each file:
- Resware will default to disbursing as a check. If the preference is to disburse as a wire:
Admin/Partners/Edit Underwriter/Underwriter
- Check the Use Wire instead of Check when Exporting option on the Underwriter Data panel.
- If the preference is to not to auto-disburse the batch, but still want to remit from the remittance ledger, then the user will need to go into each file and manually create the disbursement.
- Click the New Check button.
- Fill in the Payee, Type, and Amount fields.
- Click the Save button.
- The check will show a Pending status.
Printing the Remittance Check
Accounting/Print Checks
- Select the appropriate Office, the remittance ledger, and the appropriate Transactee (the underwriter)
- Select the disbursements from the report and then do one of the following:
- Print Selected – will print all the pending disbursements selected on individual checks.
- Print All – will print all the pending disbursements in the queue on individual checks.
- Combine, Print Selected – will combine all selected disbursements into one check and print that check.
- Once the check has been issued, the corresponding check number will appear in File/Remittance panel:
Creating a New Settlement Type
This may be necessary in areas where it’s customary/required to charge additional fees, such as CPLs or policy fees (e.g. TIEFF, Florida surcharge), and remit those fees to the underwriter. If this is not needed, skip this section.
Admin/General Setup/Settlement Type Defaults
- Select an existing settlement type and use the Copy button. If Copy isn’t enabled, the line selected is not copyable. The new settlement type will be displayed as Copy – [Original Name].
- The following settlement types can be copied:
- Buyer Credit
- Seller Credit
- Buyer Credits Seller (Prorations)
- Seller Credits Buyer (Prorations)
- Buyer Payoff
- Additional Payoff
- Misc 801
- Misc 802
- Misc 1101
- Misc 1102
- Miscellaneous Escrow Charges
- Miscellaneous Title Charges
- Miscellaneous Recording Charges
- Miscellaneous Transfer Charges
- Miscellaneous Settlement Charges
- Any type created by copying an existing type
- Select Yes.
- The line will be copied and added as Copy – [Original Name].
- Find the line, highlight it, and click Edit.
- Change the description in the editable portion of the HUD Line box.
- Select Title Charge Specific tab.
- Check the Remittable box. This will tell Resware that this line should be available as an option for a remittance calculation in the underwriter remittance setup.
- The RemittanceAmount property on the Property tab should be automatically selected when the Remittable box on Title Charges is checked.
- If the line should be associated with a policy type (e.g. lender’s premium tax would be remitted when the lender’s coverage is remitted), select the policy in the drop-down.
- This is not a requirement. Some fees that may be remittable, like CPLs, may not be linked to a specific policy.
- If the check or wire for the remittance for this line should be separate from the check or wire for the remittance for the premium or other remittable lines, check the Separate Remittance Check/Wire box.
- Click Save.
