What it does
CM 66 06 modifies the Accounts Receivable Coverage Form (CM 00 66). It deletes the Determination Of Receivables and Coinsurance conditions and substitutes a reporting arrangement. The insured reports the amount of receivables at each premises within 30 days after each reporting period, and premium is computed from the reports. If the outstanding amount cannot be established at the time of loss, it is estimated from the balance at the end of the same month of the prior year, adjusted by the percentage change between the two preceding 12-month periods, then reduced for unaffected accounts, collections, bad debt and unearned interest.
Who needs it
Seasonal businesses, wholesalers and distributors whose receivables peak at certain times. Reporting avoids paying for peak values year-round while keeping the limit adequate.
Quoting and selling notes
Explain the reporting duty and the consequences of late or low reports. Set the limit at the expected peak, since reporting does not raise the limit.
