LIMITS

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LIMITS.PNG
Name Policy Limits
Shortcut LIMITS
Area Policy
 

See the NOVUS Walkthrough Guide for further information.


This program enables the limits and, if appropriate, the reinstatements on a policy to be configured. In the case of an excess of loss treaty, the limits would be known in a number of various currencies and the policy would consist of a number of layers corresponding to the sections on the policy. Limits may be in the form of:

Layer 1 (Section A) 3,000,000 xs 1,000,000

Layer 2 (Section B) GBP 10,000,000 xs 4,000,000

Claims would be acceptable in other currencies at predetermined rates of exchange.

The policy must have been configured in the ERISK program with the currency which will act as the base currency when creating up the limits. In the example above, the policy currency of the policy concerned must be GBP.

It is necessary to create the limits before any loss amounts can be entered. It is recommended that limits are set up in all possible currencies before claimed amounts are entered in the claim entry option.

It should be noted that limits cannot be changed once transactions have been carried out. If the limits are changed prior to the transaction it is necessary to recommit the calculations

N.B. When setting up limits the policy currency must be created first, then additional currencies can be added at different rates of exchange.


The limit should be greater than the excess point. The reinstatement limits are not zero.

This program may be accessed as a stand-alone program using the LIMITS shortcut command, from within the claims system, or through the RISKNEW program. In the RISKNEW program, only limits in policy currency may be configured provided the policies have been created in the RISKNEW program with an 'X' processing group (see policy types in the CODES program).

The deductible (excess point) and the limit fields in the RISKNEW program may be used for this purpose. If the limits have been specified in other currencies on the slip then it will be necessary to access the LIMITS program directly to enter other currencies. The policy limits expressed in all appropriate currencies should be fully configured before processing a claim.

Policy Limits

For each policy number, year and section, limits and excess points must be created in one or more currencies. Limits and excess points can be added by peril code, and a PML (probable maximum loss) can be added.

The first currency entered is regarded as the base currency to which the rates of exchanges refer. Creating limits and excess points in multiple currencies will ensure that the calculation program apportions the losses over such currencies.

Column name Description
Pol No/Year Policy number and year.
Policy Currency The current set in the risk record screen as the policy base currency
Locked The padlock symbol will display if the limits have been locked by existing transactions
Section Section letter
Section Type Section type description
Section Title Section title
Peril Code Peril code for section described
Currency Base currency for this policy’s claims.
Exchange rate Rate of exchange with respect to the base currency.
Limit Claim limit. Claims above this are treated as a total loss.
Excess Point Excess point
PML Probable maximum loss value

How to create limits

  1. From the LIMITS program, select the policy number and year from the drop-down list of values.
  2. Select the required section from the drop-down list of values - selecting 'All' will set a Policy Limit. If a section letter is selected, the section type and section title will auto-populate and a Section Limit will be set. N.B. The claims system requires a Section Limit to be set before any claims calculations can be processed
  3. To set a Peril Code limit, first, select an applicable section and then select the required peril code from the drop-down list of values.
  4. Select the base currency from the drop-down list of values. The first currency entered will be the policy base currency and the limits are set up in this currency.
  5. Enter limit, excess point and PML
  6. Repeat as required for policy limits, section limits, peril code limits and for other currencies (the amounts for other currencies will be configured automatically by selecting the required section or peril code and stating the rate of exchange)
  7. Commit the limits configuration by clicking the Save button.


Peril Code: Peril codes enable the policy to have different limits for different aspects of the business. For example, there may be a different set of limits for the hull of a cargo vessel and its equipment. Any number of peril codes can be configured using the CODES program after which the limits for each peril code can be created in LIMITS. If peril codes are not required (at this stage), this field should be left blank. Reinstatements are not sensitive to peril codes.

N.B. By default fees are excluded from the limit. If the Fees Inc flag = Y then fees are included in the limit in the settlement calculations.

For further information about reinstatements, please see the Reinstatement Configuration program


Version History

V 6.0.0 - Updated to the latest version

V4.2.0 - Updated to the latest version.

v36K - URM 3923, extend from 11 section to 26 sections
v36K - L/R LOV modified to show existing limits
v32M - write capacity to risk_max_si for reinstatement
v24M - Navigation improved.
v23M - Possible navigation issue corrected.
v19T - First version of this form to use the new style. No other updates except the restyle.