“System And Method Of Adjusting Insurance Premiums” in Patent Application Approval Process (USPTO 20210027385)

2021 FEB 16 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- A patent application by the inventors Stich, Randy Thomas (Sarasota, FL); Richardson, Gex Franklin (Fort Lauderdale, FL), filed on July 23, 2019, was made available online on January 28, 2021, according to news reporting originating from Washington, D.C., by NewsRx correspondents.

This patent application is assigned to CTS Information Services LLC d/B/A InsurePay (Fort Lauderdale, Florida, United States).

The following quote was obtained by the news editors from the background information supplied by the inventors: “Typically, insurance providers (each, a ‘carrier’) issuing general liability policies for restaurants, bars, gasoline stations, convenience stores, and other retail or commercial establishments (each, an ‘insured’) use an insured’s previous year’s sales or other historical financial data to estimate necessary general liability insurance coverage and, more importantly, attendant premium payments that are due to secure such coverage. In many retail and other industries, however, it is common for a given insured’s sales receipts, revenue, or other historical data that are used for the insurance carrier’s estimate to vary significantly from year to year (i.e., enough such that a year-over-year variation may affect the carrier’s estimate, resulting in over- or under-payment on the part of the insured). This uncertainty may be exacerbated in the case of a start-up company, for instance, or if an insured is a relatively newly-formed entity, as such companies with short histories may have no way of predicting, a priori, sales or revenue figures for a given period based upon historical data. In these and other circumstances where historical data may be sparse or unreliable, an insurance carrier may not have sufficient data to make an accurate determination of what the actual premium should have been until incorrect premiums have been paid throughout the policy term (i.e., after a year has elapsed or the policy has expired and the insurance carrier has conducted an audit).

“In practice, the audit and certification process may not conclude until weeks or months following expiration of the policy, at which point, the insured may have already extended or renewed the policy at an incorrect coverage level or premium rate (or both) based upon inaccurate historical data; in many instances, such incorrect coverage levels or premium rates are complicated to change during the policy term. Since coverage amounts and premium payments are traditionally based upon estimations, the insured may pay more or less than what would be appropriate if the policy were based upon better information, and both the insured and the insurance carrier must wait until the next year’s audit to ‘true up’ the policy by agreeing that additional payments are to be charged, on the one hand, or that overpayments are to be refunded or credited, on the other hand.

“From at least the foregoing, it will be appreciated that what is needed is a system and method of adjusting insurance premiums during the term of an insurance policy, for instance, based upon periodic data received from an insured during the term, such that an insurance carrier may determine an accurate premium payment without having to wait for an audit. Such a system and method may have particular utility in connection with general liability insurance policies for insureds in the retail space, but the utility of the disclosed subject matter is not limited to such circumstances.”

In addition to the background information obtained for this patent application, NewsRx journalists also obtained the inventors’ summary information for this patent application: “The following presents a simplified summary of the disclosure in order to provide a basic understanding of some aspects of various embodiments disclosed herein. This summary is not an extensive overview of the disclosure. It is intended neither to identify key or critical elements of the disclosed embodiments nor to delineate the scope of those embodiments. Its sole purpose is to present some concepts of the disclosed subject matter in a simplified form as a prelude to the more detailed description that is presented later.

“The present disclosure describes a system and method generally employing a ‘pay-as-you-go’ paradigm. In that regard, actual sales or other relevant financial data may be collected, for example, from a point of sale (‘POS’) terminal or other data processing system at the insured’s location; additionally or alternatively, other types of data may be collected, for instance, from an invoicing system, an electronic commerce platform, or other data processing system that is operated or maintained by the insured (i.e., even if such a system were not on-site at the insured’s location or deployed in a retail establishment). In any event, such sales data or other data or information that may be relevant to an insurance policy may be collected or aggregated in real time or near real time, either at the POS or the insured’s location, or in connection with a remote system owned, operated, or maintained by the insured or in connection with the insured’s business operations. Using data periodically collected from such sources, an accurate premium may be computed and dynamically adjusted throughout the policy year, which may eliminate or reduce the need for audits, or at least result in fewer audits determining that previous payments have been materially inaccurate.

“In accordance with one aspect of the disclosed subject matter, for example, an insurance premium computation method may generally be summarized as comprising: periodically acquiring insured data from a data processing system operated or maintained by an insured, the insured data related to a business operated by the insured; applying rules logic to the insured data in combination with carrier data acquired from an insurance carrier and related to an insurance policy associated with the insured; computing a dynamically adjusted premium in accordance with output from the rules logic; obtaining a payment in an amount of the dynamically adjusted premium from a first account associated with the insured; and remitting the payment to a second account associated with the carrier.

“Methods are disclosed wherein the data processing system is a financial resource system, wherein the financial resource system is a point of sale (‘POS’) terminal, and/or wherein the financial resource system is an accounting software application. In some implementations, the computing comprises utilizing a machine learning algorithm. Additionally or alternatively, the periodically acquiring comprises receiving insured data related to a present financial transaction in near real time. In some methods, the insured data are representative of a monetary value of the present financial transaction.

“In accordance with another aspect of the disclosed subject matter, an insurance premium computation system may generally comprise: a data processing system operated or maintained by an insured and operative to acquire insured data related to a business of the insured; rules logic to receive the insured data from the data processing system and carrier data from an insurance carrier, the carrier data related to an insurance policy associated with the insured; a processing component to compute a dynamically adjusted premium for the insurance policy in accordance with output from the rules logic; and a financial transaction engine, the financial transaction engine to obtain a payment in an amount of the dynamically adjusted premium from a first account associated with the insured and to remit the payment to a second account associated with the insurance carrier.

“Systems are disclosed wherein the data processing system is a financial resource system, wherein the financial resource system is a point of sale (‘POS’) terminal, and/or wherein the financial resource system is an accounting software application. In some implementations, the processing component utilizes a machine learning algorithm. In some disclosed implementations, the data processing system acquires insured data related to a present financial transaction in near real time. As set forth in more detail below, the insured data may be representative of a monetary value of the present financial transaction.

“The foregoing and other aspects of various disclosed embodiments will be apparent through examination of the following detailed description thereof in conjunction with the accompanying drawing figures, in which like reference numerals are used to represent like components throughout, unless otherwise noted.”

The claims supplied by the inventors are:

“1. An insurance premium computation method comprising: periodically acquiring insured data from a data processing system operated or maintained by an insured, the insured data related to a business operated by the insured; applying rules logic to the insured data in combination with carrier data acquired from an insurance carrier and related to an insurance policy associated with the insured; computing a dynamically adjusted premium in accordance with output from the rules logic; obtaining a payment in an amount of the dynamically adjusted premium from a first account associated with the insured; and remitting the payment to a second account associated with the carrier.

“2. The method of claim 1 wherein the data processing system is a financial resource system.

“3. The method of claim 2 wherein the financial resource system is a point of sale (“POS”) terminal.

“4. The method of claim 2 wherein the financial resource system is an accounting software application.

“5. The method of claim 1 wherein the computing comprises utilizing a machine learning algorithm.

“6. The method of claim 1 wherein the periodically acquiring comprises receiving insured data related to a present financial transaction in near real time.

“7. The method of claim 6 wherein the insured data are representative of a monetary value of the present financial transaction.

“8. An insurance premium computation system comprising: a data processing system operated or maintained by an insured and operative to acquire insured data related to a business of the insured; rules logic to receive the insured data from the data processing system and carrier data from an insurance carrier, the carrier data related to an insurance policy associated with the insured; a processing component to compute a dynamically adjusted premium for the insurance policy in accordance with output from the rules logic; and a financial transaction engine, the financial transaction engine to obtain a payment in an amount of the dynamically adjusted premium from a first account associated with the insured and to remit the payment to a second account associated with the insurance carrier.

“9. The system of claim 8 wherein the data processing system is a financial resource system.

“10. The system of claim 9 wherein the financial resource system is a point of sale (“POS”) terminal.

“11. The system of claim 9 wherein the financial resource system is an accounting software application.

“12. The system of claim 8 wherein the processing component utilizes a machine learning algorithm.

“13. The system of claim 8 wherein the data processing system acquires insured data related to a present financial transaction in near real time.

“14. The system of claim 8 wherein the insured data are representative of a monetary value of the present financial transaction.”

URL and more information on this patent application, see: Stich, Randy Thomas; Richardson, Gex Franklin. System And Method Of Adjusting Insurance Premiums. Filed July 23, 2019 and posted January 28, 2021. Patent URL: http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.html&r=1&f=G&l=50&s1=%2220210027385%22.PGNR.&OS=DN/20210027385&RS=DN/20210027385

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