@etherisc/gif-next 0.0.2-bcecc4c-647 → 0.0.2-bd8fe7c-423

package/contracts/product/BasicProduct.sol

@@ -1,43 +1,15 @@
 // SPDX-License-Identifier: Apache-2.0
 pragma solidity ^0.8.20;
 
-import {IERC20Metadata} from "@openzeppelin/contracts/token/ERC20/extensions/IERC20Metadata.sol";
-
-import {Amount, AmountLib} from "../type/Amount.sol";
-import {ClaimId} from "../type/ClaimId.sol";
-import {InstanceLinkedComponent} from "../shared/InstanceLinkedComponent.sol";
-import {Fee, FeeLib} from "../type/Fee.sol";
-import {IRisk} from "../instance/module/IRisk.sol";
-import {IApplicationService} from "./IApplicationService.sol";
+import {Fee} from "../type/Fee.sol";
 import {IAuthorization} from "../authorization/IAuthorization.sol";
-import {IComponentService} from "../shared/IComponentService.sol";
-import {IPolicyService} from "./IPolicyService.sol";
-import {IProductService} from "./IProductService.sol";
-import {IClaimService} from "./IClaimService.sol";
-import {IPricingService} from "./IPricingService.sol";
-import {IProductComponent} from "./IProductComponent.sol";
-import {NftId, NftIdLib} from "../type/NftId.sol";
+import {NftId} from "../type/NftId.sol";
 import {Product} from "../product/Product.sol";
-import {PayoutId} from "../type/PayoutId.sol";
-import {COMPONENT, PRODUCT, APPLICATION, POLICY, CLAIM, PRICE } from "../type/ObjectType.sol";
-import {ReferralId} from "../type/Referral.sol";
-import {RiskId, RiskIdLib} from "../type/RiskId.sol";
-import {Seconds} from "../type/Seconds.sol";
-import {StateId} from "../type/StateId.sol";
-import {Timestamp} from "../type/Timestamp.sol";
-
-import {TokenHandler} from "../shared/TokenHandler.sol";
-
-import {InstanceReader} from "../instance/InstanceReader.sol";
-import {IPolicy} from "../instance/module/IPolicy.sol";
-import {IComponents} from "../instance/module/IComponents.sol";
-import {Pool} from "../pool/Pool.sol";
-import {Distribution} from "../distribution/Distribution.sol";
 
 abstract contract BasicProduct is
     Product
 {
- 
+
     function setFees(
         Fee memory productFee,
         Fee memory processingFee
@@ -49,8 +21,6 @@ abstract contract BasicProduct is
     {
         _setFees(productFee, processingFee);
     }
-
-
     function _initializeBasicProduct(
         address registry,
         NftId instanceNftId,

package/contracts/product/ClaimService.sol

@@ -294,7 +294,7 @@ contract ClaimService is
         (
             Amount netPayoutAmount,
             address beneficiary
-        ) = _transferPayoutAmount(
+        ) = _calculatePayoutAmount(
             instanceReader,
             policyNftId,
             policyInfo,
@@ -302,11 +302,24 @@ contract ClaimService is
 
         // TODO callback IPolicyHolder
 
+        if (netPayoutAmount.eqz()) {
+            revert ErrorClaimsServicePayoutAmountIsZero(policyNftId, payoutId);
+        }
+
         emit LogClaimServicePayoutProcessed(policyNftId, payoutId, payoutAmount, beneficiary, netPayoutAmount);
+
+        {
+            NftId poolNftId = getRegistry().getObjectInfo(policyInfo.bundleNftId).parentNftId;
+            IComponents.ComponentInfo memory poolInfo = instanceReader.getComponentInfo(poolNftId);
+            // TODO: centralize token handling (issue #471)
+            poolInfo.tokenHandler.transfer(
+                poolInfo.wallet,
+                beneficiary,
+                netPayoutAmount);
+        }
     }
 
-    // TODO create (I)TreasuryService that deals with all gif related token transfers
-    function _transferPayoutAmount(
+    function _calculatePayoutAmount(
         InstanceReader instanceReader,
         NftId policyNftId,
         IPolicy.PolicyInfo memory policyInfo,
@@ -336,12 +349,6 @@ contract ClaimService is
                 // TODO transfer processing fees to product wallet
                 // TODO inform product to update fee book keeping
             }
-            
-            // TODO: centralize token handling (issue #471)
-            poolInfo.tokenHandler.transfer(
-                poolInfo.wallet,
-                beneficiary,
-                netPayoutAmount);
         }
     }
 

package/contracts/product/IClaimService.sol

@@ -31,6 +31,7 @@ interface IClaimService is
     error ErrorClaimServicePolicyProductMismatch(NftId policyNftId, NftId expectedProduct, NftId actualProduct);
     error ErrorClaimServicePolicyNotOpen(NftId policyNftId);
     error ErrorClaimServiceClaimExceedsSumInsured(NftId policyNftId, Amount sumInsured, Amount payoutsIncludingClaimAmount);
+    error ErrorClaimsServicePayoutAmountIsZero(NftId policyNftId, PayoutId payoutId);
 
     error ErrorClaimServiceClaimWithOpenPayouts(NftId policyNftId, ClaimId claimId, uint8 openPayouts);
     error ErrorClaimServiceClaimWithMissingPayouts(NftId policyNftId, ClaimId claimId, Amount claimAmount, Amount paidAmount);

package/contracts/product/IPolicyService.sol

@@ -20,25 +20,31 @@ interface IPolicyService is IService {
 
     error ErrorPolicyServicePolicyProductMismatch(NftId applicationNftId, NftId expectedProductNftId, NftId actualProductNftId);
     error ErrorPolicyServicePolicyStateNotApplied(NftId applicationNftId);
-    error ErrorPolicyServicePolicyStateNotCollateralizedOrApplied(NftId applicationNftId);
+    error ErrorPolicyServicePolicyStateNotCollateralized(NftId applicationNftId);
+    error ErrorPolicyServicePolicyAlreadyActivated(NftId policyNftId);
 
-    error ErrorPolicyServicePremiumHigherThanExpected(Amount premiumExpectedAmount, Amount premiumToBePaidAmount);
+    error ErrorPolicyServicePremiumHigherThanExpected(uint256 premiumExpectedAmount, uint256 premiumToBePaidAmount);
     error ErrorPolicyServiceBalanceInsufficient(address policyOwner, uint256 premiumAmount, uint256 balance);
     error ErrorPolicyServiceAllowanceInsufficient(address policyOwner, address tokenHandler, uint256 premiumAmount, uint256 allowance);
 
-    error ErrorIPolicyServiceInsufficientAllowance(address customer, address tokenHandlerAddress, uint256 amount);
+    error ErrorPolicyServiceInsufficientAllowance(address customer, address tokenHandlerAddress, uint256 amount);
     error ErrorPolicyServicePremiumAlreadyPaid(NftId policyNftId, Amount premiumPaidAmount);
-    error ErrorIPolicyServicePolicyNotActivated(NftId policyNftId);
-    error ErrorIPolicyServicePolicyAlreadyClosed(NftId policyNftId);
-    error ErrorIPolicyServicePolicyNotActive(NftId policyNftId, StateId state);
+    error ErrorPolicyServicePolicyNotActivated(NftId policyNftId);
+    error ErrorPolicyServicePolicyAlreadyClosed(NftId policyNftId);
+    error ErrorPolicyServicePolicyNotActive(NftId policyNftId, StateId state);
     error ErrorPolicyServicePremiumNotFullyPaid(NftId policyNftId, Amount premiumAmount, Amount premiumPaidAmount);
-    error ErrorIPolicyServiceOpenClaims(NftId policyNftId, uint16 openClaimsCount);
-    error ErrorIPolicyServicePolicyHasNotExpired(NftId policyNftId, Timestamp expiredAt);
+    error ErrorPolicyServiceOpenClaims(NftId policyNftId, uint16 openClaimsCount);
+    error ErrorPolicyServicePolicyHasNotExpired(NftId policyNftId, Timestamp expiredAt);
+    error ErrorPolicyServicePolicyExpirationTooLate(NftId policyNftId, Timestamp upperLimit, Timestamp expiredAt);
+    error ErrorPolicyServicePolicyExpirationTooEarly(NftId policyNftId, Timestamp lowerLimit, Timestamp expiredAt);
 
     error ErrorPolicyServicePremiumMismatch(NftId policyNftId, Amount expectedPremiumAmount, Amount recalculatedPremiumAmount);
     error ErrorPolicyServiceTransferredPremiumMismatch(NftId policyNftId, Amount expectedPremiumAmount, Amount transferredPremiumAmount);
 
-    /// @dev collateralizes the policy represented by {policyNftId}
+    event LogPolicyServicePolicyDeclined(NftId policyNftId);
+    event LogPolicyServicePolicyExpirationUpdated(NftId policyNftId, Timestamp expiredAt);
+
+    /// @dev collateralizes the policy represented by {policyNftId}. locks the sum insured amount in the pool.
     /// sets the policy state to collateralized
     /// may set the policy state to activated and set the activation date
     /// optionally collects premiums and activates the policy.
@@ -57,18 +63,19 @@ interface IPolicyService is IService {
     /// only the related product may decline an application
     function decline(NftId policyNftId) external;
 
-    /// @dev collects the premium token for the specified policy
+    /// @dev collects the premium token for the specified policy (must be in COLLATERALIZED or ACTIVE state)
     function collectPremium(NftId policyNftId, Timestamp activateAt) external;
 
     /// @dev activates the specified policy and sets the activation date in the policy metadata
     /// to activate a policy it needs to be in underwritten state
     function activate(NftId policyNftId, Timestamp activateAt) external;
 
-    /// @dev expires the specified policy and sets the expiry date in the policy metadata
+    /// @dev expires the specified policy and sets the expiry date in the policy metadata. If expiry date is set to 0, then the earliest possible expiry date (current blocktime) is set
     /// to expire a policy it must be in active state, policies may be expired even when the predefined expiry date is still in the future
     /// a policy can only be closed when it has been expired. in addition, it must not have any open claims
     /// this function can only be called by a product. the policy needs to match with the calling product
-    function expire(NftId policyNftId) external;
+    /// @return expiredAt the effective expiry date
+    function expire(NftId policyNftId, Timestamp expireAt) external returns (Timestamp expiredAt);
 
     /// @dev closes the specified policy and sets the closed data in the policy metadata
     /// a policy can only be closed when it has been expired. in addition, it must not have any open claims

package/contracts/product/PolicyService.sol

@@ -1,26 +1,21 @@
 // SPDX-License-Identifier: Apache-2.0
 pragma solidity ^0.8.20;
 
+import {IERC20Metadata} from "@openzeppelin/contracts/token/ERC20/extensions/IERC20Metadata.sol";
+
 import {IRegistry} from "../registry/IRegistry.sol";
 import {Product} from "./Product.sol";
 import {IComponents} from "../instance/module/IComponents.sol";
-import {IDistributionComponent} from "../distribution/IDistributionComponent.sol";
 import {IInstance} from "../instance/IInstance.sol";
 import {IPolicy} from "../instance/module/IPolicy.sol";
-import {IPoolComponent} from "../pool/IPoolComponent.sol";
-import {IRisk} from "../instance/module/IRisk.sol";
-import {IBundle} from "../instance/module/IBundle.sol";
 
 import {TokenHandler} from "../shared/TokenHandler.sol";
 
 import {Amount, AmountLib} from "../type/Amount.sol";
-import {ClaimId, ClaimIdLib} from "../type/ClaimId.sol";
 import {Timestamp, TimestampLib, zeroTimestamp} from "../type/Timestamp.sol";
-import {UFixed, UFixedLib} from "../type/UFixed.sol";
 import {ObjectType, APPLICATION, COMPONENT, DISTRIBUTION, PRODUCT, POOL, POLICY, BUNDLE, CLAIM, PRICE} from "../type/ObjectType.sol";
-import {APPLIED, COLLATERALIZED, ACTIVE, KEEP_STATE, CLOSED, DECLINED, CONFIRMED} from "../type/StateId.sol";
+import {APPLIED, COLLATERALIZED, KEEP_STATE, CLOSED, DECLINED} from "../type/StateId.sol";
 import {NftId, NftIdLib} from "../type/NftId.sol";
-import {PayoutId, PayoutIdLib} from "../type/PayoutId.sol";
 import {ReferralId} from "../type/Referral.sol";
 import {StateId} from "../type/StateId.sol";
 import {VersionPart} from "../type/Version.sol";
@@ -36,8 +31,6 @@ import {InstanceStore} from "../instance/InstanceStore.sol";
 import {IPolicyService} from "./IPolicyService.sol";
 import {IPoolService} from "../pool/IPoolService.sol";
 import {IPricingService} from "./IPricingService.sol";
-import {IService} from "../shared/IService.sol";
-import {Service} from "../shared/Service.sol";
 
 contract PolicyService is
     ComponentVerifyingService, 
@@ -90,20 +83,43 @@ contract PolicyService is
         (, productInfo,) = _getAndVerifyActiveComponent(PRODUCT());
         product = Product(productInfo.objectAddress);
     }
-
+    
 
     function decline(
-        NftId policyNftId
+        NftId applicationNftId // = policyNftId
     )
         external
-        override
+        virtual override
     {
-        revert();
+        (NftId productNftId,, IInstance instance) = _getAndVerifyActiveComponent(PRODUCT());
+        InstanceReader instanceReader = instance.getInstanceReader();
+
+        // check policy is in state applied
+        if (instanceReader.getPolicyState(applicationNftId) != APPLIED()) {
+            revert ErrorPolicyServicePolicyStateNotApplied(applicationNftId);
+        }
+
+        // check policy matches with calling product
+        IPolicy.PolicyInfo memory applicationInfo = instanceReader.getPolicyInfo(applicationNftId);
+        if(applicationInfo.productNftId != productNftId) {
+            revert ErrorPolicyServicePolicyProductMismatch(
+                applicationNftId, 
+                applicationInfo.productNftId, 
+                productNftId);
+        }
+        
+
+        // store updated policy info
+        instance.getInstanceStore().updatePolicyState(
+            applicationNftId, 
+            DECLINED());
+
+        emit LogPolicyServicePolicyDeclined(applicationNftId);
     }
 
     event LogDebug(uint idx, string message);
 
-    /// @dev underwites application which includes the locking of the required collateral from the pool.
+    /// @inheritdoc IPolicyService
     function collateralize(
         NftId applicationNftId, // = policyNftId
         bool requirePremiumPayment,
@@ -146,19 +162,20 @@ contract PolicyService is
 
         // optional activation of policy
         if(activateAt > zeroTimestamp()) {
-            newPolicyState = ACTIVE();
             applicationInfo.activatedAt = activateAt;
             applicationInfo.expiredAt = activateAt.addSeconds(applicationInfo.lifetime);
         }
 
-        // optional collection of premium
+        IPolicy.Premium memory premium;
+
+        // optional: calculate the premium and update counters for collection at the end of this function
         if(requirePremiumPayment) {
-            Amount premiumPaidAmount = _calculateAndCollectPremium(
+            premium = _calculateAndProcessPremium(
                 instance,
                 applicationNftId,
                 applicationInfo);
 
-            applicationInfo.premiumPaidAmount = premiumPaidAmount;
+            applicationInfo.premiumPaidAmount = AmountLib.toAmount(premium.premiumAmount);
         }
 
         // store updated policy info
@@ -170,9 +187,14 @@ contract PolicyService is
         // TODO add calling pool contract if it needs to validate application
 
         // TODO: add logging
-    }
 
+        // optional: transfer funds for premium 
+        if(requirePremiumPayment) {
+            _transferFunds(instanceReader, applicationNftId, applicationInfo.productNftId, premium);
+        }
+    }
 
+    /// @inheritdoc IPolicyService
     function collectPremium(
         NftId policyNftId, 
         Timestamp activateAt
@@ -186,8 +208,8 @@ contract PolicyService is
         StateId stateId = instanceReader.getPolicyState(policyNftId);
 
         // check policy is in state collateralized or active
-        if (!(stateId == COLLATERALIZED() || stateId == ACTIVE())) {
-            revert ErrorPolicyServicePolicyStateNotCollateralizedOrApplied(policyNftId);
+        if (!(stateId == COLLATERALIZED())) {
+            revert ErrorPolicyServicePolicyStateNotCollateralized(policyNftId);
         }
 
         IPolicy.PolicyInfo memory policyInfo = instanceReader.getPolicyInfo(policyNftId);
@@ -197,11 +219,14 @@ contract PolicyService is
             revert ErrorPolicyServicePremiumAlreadyPaid(policyNftId, policyInfo.premiumPaidAmount);
         }
 
-        policyInfo.premiumPaidAmount = _calculateAndCollectPremium(
+        // calculate premium
+        IPolicy.Premium memory premium = _calculateAndProcessPremium(
                 instance,
                 policyNftId,
                 policyInfo);
 
+        policyInfo.premiumPaidAmount = AmountLib.toAmount(premium.premiumAmount);
+
         instance.getInstanceStore().updatePolicy(policyNftId, policyInfo, KEEP_STATE());
 
         if(activateAt.gtz() && policyInfo.activatedAt.eqz()) {
@@ -209,8 +234,11 @@ contract PolicyService is
         }
 
         // TODO: add logging
+
+        _transferFunds(instanceReader, policyNftId, policyInfo.productNftId, premium);
     }
 
+    /// @inheritdoc IPolicyService
     function activate(NftId policyNftId, Timestamp activateAt) public override {
         // check caller is registered product
         (,, IInstance instance) = _getAndVerifyActiveComponent(PRODUCT());
@@ -218,27 +246,66 @@ contract PolicyService is
 
         IPolicy.PolicyInfo memory policyInfo = instanceReader.getPolicyInfo(policyNftId);
 
-        require(
-            policyInfo.activatedAt.eqz(),
-            "ERROR:PRS-020:ALREADY_ACTIVATED");
+        if(! policyInfo.activatedAt.eqz()) {
+            revert ErrorPolicyServicePolicyAlreadyActivated(policyNftId);
+        }
 
         policyInfo.activatedAt = activateAt;
         policyInfo.expiredAt = activateAt.addSeconds(policyInfo.lifetime);
 
-        instance.getInstanceStore().updatePolicy(policyNftId, policyInfo, ACTIVE());
+        instance.getInstanceStore().updatePolicy(policyNftId, policyInfo, KEEP_STATE());
 
         // TODO: add logging
     }
 
-
+    /// @inheritdoc IPolicyService
     function expire(
-        NftId policyNftId
+        NftId policyNftId,
+        Timestamp expireAt
     )
         external
         override
-        // solhint-disable-next-line no-empty-blocks
+        virtual
+        returns (Timestamp)
     {
-        
+        (NftId productNftId,, IInstance instance) = _getAndVerifyActiveComponent(PRODUCT());
+        InstanceReader instanceReader = instance.getInstanceReader();
+
+        // check policy matches with calling product
+        IPolicy.PolicyInfo memory policyInfo = instanceReader.getPolicyInfo(policyNftId);
+        if(policyInfo.productNftId != productNftId) {
+            revert ErrorPolicyServicePolicyProductMismatch(
+                policyNftId, 
+                policyInfo.productNftId, 
+                productNftId);
+        }
+
+        // check policy is active
+        StateId policyState = instanceReader.getPolicyState(policyNftId);
+        if (!_policyHasBeenActivated(policyState, policyInfo)) {
+            revert ErrorPolicyServicePolicyNotActive(policyNftId, policyState);
+        }
+
+        // set expiryAt to current block timestamp if not set
+        if (expireAt.eqz()) {
+            expireAt = TimestampLib.blockTimestamp();
+        }
+
+        // check expiryAt represents a valid expiry time
+        if (expireAt >= policyInfo.expiredAt) {
+            revert ErrorPolicyServicePolicyExpirationTooLate(policyNftId, policyInfo.expiredAt, expireAt);
+        }
+        if (expireAt < TimestampLib.blockTimestamp()) {
+            revert ErrorPolicyServicePolicyExpirationTooEarly(policyNftId, TimestampLib.blockTimestamp(), expireAt);
+        }
+
+        // update policyInfo with new expiryAt timestamp
+        policyInfo.expiredAt = expireAt;
+        instance.getInstanceStore().updatePolicy(policyNftId, policyInfo, KEEP_STATE());
+
+        emit LogPolicyServicePolicyExpirationUpdated(policyNftId, expireAt);
+
+        return expireAt;
     }
 
     function close(
@@ -250,19 +317,21 @@ contract PolicyService is
         (,, IInstance instance) = _getAndVerifyActiveComponent(PRODUCT());
         InstanceReader instanceReader = instance.getInstanceReader();
 
+        // check that policy has been activated
         IPolicy.PolicyInfo memory policyInfo = instanceReader.getPolicyInfo(policyNftId);
-
-        if (policyInfo.activatedAt.eqz()) {
-            revert ErrorIPolicyServicePolicyNotActivated(policyNftId);
+        StateId policyState = instanceReader.getPolicyState(policyNftId);
+        if (!_policyHasBeenActivated(policyState, policyInfo)) {
+            revert ErrorPolicyServicePolicyNotActive(policyNftId, policyState);
         }
 
-        StateId state = instanceReader.getPolicyState(policyNftId);
-        if (state != ACTIVE()) {
-            revert ErrorIPolicyServicePolicyNotActive(policyNftId, state);
+        // check that policy has not already been closed
+        if (policyInfo.closedAt.gtz()) {
+            revert ErrorPolicyServicePolicyAlreadyClosed(policyNftId);
         }
 
-        if (policyInfo.closedAt.gtz()) {
-            revert ErrorIPolicyServicePolicyAlreadyClosed(policyNftId);
+        // check that policy does not have any open claims
+        if (policyInfo.openClaimsCount > 0) {
+            revert ErrorPolicyServiceOpenClaims(policyNftId, policyInfo.openClaimsCount);
         }
 
         // TODO consider to allow for underpaid premiums (with the effects of reducing max payouts accordingly)
@@ -270,23 +339,37 @@ contract PolicyService is
             revert ErrorPolicyServicePremiumNotFullyPaid(policyNftId, policyInfo.premiumAmount, policyInfo.premiumPaidAmount);
         }
 
-        if (policyInfo.openClaimsCount > 0) {
-            revert ErrorIPolicyServiceOpenClaims(policyNftId, policyInfo.openClaimsCount);
-        }
-
-        policyInfo.closedAt = TimestampLib.blockTimestamp();
-
+        // release (remaining) collateral that was blocked by policy
         _poolService.releaseCollateral(
             instance, 
             address(instanceReader.getComponentInfo(policyInfo.productNftId).token),
             policyNftId, 
             policyInfo);
 
+        // update policy state to closed
+        policyInfo.closedAt = TimestampLib.blockTimestamp();
         instance.getInstanceStore().updatePolicy(policyNftId, policyInfo, CLOSED());
     }
 
 
-    function _calculateAndCollectPremium(
+    /// @dev checks that policy has been collateralized and has been activated.
+    /// does not check if policy has been expired or closed.
+    function _policyHasBeenActivated(
+        StateId policyState,
+        IPolicy.PolicyInfo memory policyInfo
+    )
+        internal
+        view
+        returns (bool)
+    {
+        if (policyState != COLLATERALIZED()) { return false; } 
+        if (TimestampLib.blockTimestamp() < policyInfo.activatedAt) { return false; } 
+        return true;
+    }
+
+
+    /// @dev calculates the premium and updates all counters in the other services
+    function _calculateAndProcessPremium(
         IInstance instance,
         NftId applicationNftId,
         IPolicy.PolicyInfo memory applicationInfo
@@ -294,13 +377,14 @@ contract PolicyService is
         internal
         virtual
         returns (
-            Amount premiumPaidAmount
+            IPolicy.Premium memory premium
         )
     {
         NftId productNftId = applicationInfo.productNftId;
+        InstanceReader instanceReader = instance.getInstanceReader();
 
         // calculate premium details
-        IPolicy.Premium memory premium = _pricingService.calculatePremium(
+        premium = _pricingService.calculatePremium(
             productNftId,
             applicationInfo.riskId,
             applicationInfo.sumInsuredAmount,
@@ -309,90 +393,63 @@ contract PolicyService is
             applicationInfo.bundleNftId,
             applicationInfo.referralId);
 
+        // ensure the calculated premium is not higher than the expected premium from the application
+        if (applicationInfo.premiumAmount.toInt() < premium.premiumAmount) {
+            revert ErrorPolicyServicePremiumHigherThanExpected(applicationInfo.premiumAmount.toInt(), premium.premiumAmount);
+        }
 
-        // update financials and transfer premium tokens
-        premiumPaidAmount = _processAndCollect(
-            instance, 
-            productNftId,
-            applicationNftId, 
-            applicationInfo.premiumAmount,
-            applicationInfo.bundleNftId,
-            applicationInfo.referralId,
-            premium);
-    }
-
-
-    function _processAndCollect(
-        IInstance instance,
-        NftId productNftId,
-        NftId policyNftId,
-        Amount premiumExpectedAmount,
-        NftId bundleNftId,
-        ReferralId referralId,
-        IPolicy.Premium memory premium
-    )
-        internal
-        virtual
-        returns (Amount premiumPaidAmount)
-    {
-        InstanceReader instanceReader = instance.getInstanceReader();
-        TokenHandler tokenHandler = instanceReader.getComponentInfo(productNftId).tokenHandler;
-        address policyHolder = getRegistry().ownerOf(policyNftId);
-        premiumPaidAmount = AmountLib.toAmount(premium.premiumAmount);
-
-        _checkPremiumBalanceAndAllowance(
-            tokenHandler, 
-            policyHolder, 
-            premiumExpectedAmount,
-            premiumPaidAmount);
+        // check if premium balance and allowance of policy holder is sufficient
+        {
+            TokenHandler tokenHandler = instanceReader.getComponentInfo(productNftId).tokenHandler;
+            address policyHolder = getRegistry().ownerOf(applicationNftId);
+        
+            _checkPremiumBalanceAndAllowance(
+                tokenHandler.getToken(), 
+                address(tokenHandler),
+                policyHolder, 
+                applicationInfo.premiumAmount,
+                AmountLib.toAmount(premium.premiumAmount));
+        }
 
-        _processSaleAndTransferFunds(
+        // update the counters
+        _processSale(
             instanceReader, 
             instance.getInstanceStore(), 
-            tokenHandler, 
-            policyHolder, 
             productNftId, 
-            bundleNftId, 
-            referralId, 
+            applicationInfo.bundleNftId, 
+            applicationInfo.referralId, 
             premium);
     }
 
-
+    /// @dev checks the balance and allowance of the policy holder
     function _checkPremiumBalanceAndAllowance(
-        TokenHandler tokenHandler, 
+        IERC20Metadata token,
+        address tokenHandlerAddress, 
         address policyHolder, 
         Amount premiumExpectedAmount,
-        Amount premiumPaidAmount
+        Amount premiumAmount
     )
         internal
         virtual
         view
     {
-        // TODO decide how to handle this properly
-        // not clear if this is the best way to handle this
-        if (premiumExpectedAmount < premiumPaidAmount) {
-            revert ErrorPolicyServicePremiumHigherThanExpected(premiumExpectedAmount, premiumPaidAmount);
-        }
-
-        uint256 premiumAmount = premiumPaidAmount.toInt();
-        uint256 balance = tokenHandler.getToken().balanceOf(policyHolder);
-        uint256 allowance = tokenHandler.getToken().allowance(policyHolder, address(tokenHandler));
+        uint256 premium = premiumAmount.toInt();
+        uint256 balance = token.balanceOf(policyHolder);
+        uint256 allowance = token.allowance(policyHolder, tokenHandlerAddress);
     
-        if (balance < premiumAmount) {
-            revert ErrorPolicyServiceBalanceInsufficient(policyHolder, premiumAmount, balance);
+        if (balance < premium) {
+            revert ErrorPolicyServiceBalanceInsufficient(policyHolder, premium, balance);
         }
 
-        if (allowance < premiumAmount) {
-            revert ErrorPolicyServiceAllowanceInsufficient(policyHolder, address(tokenHandler), premiumAmount, allowance);
+        if (allowance < premium) {
+            revert ErrorPolicyServiceAllowanceInsufficient(policyHolder, tokenHandlerAddress, premium, allowance);
         }
     }
 
-
-    function _processSaleAndTransferFunds(
+    /// @dev update counters by calling the involved services
+    function _processSale(
         InstanceReader instanceReader,
         InstanceStore instanceStore,
-        TokenHandler tokenHandler,
-        address policyHolder,
         NftId productNftId,
         NftId bundleNftId,
         ReferralId referralId,
@@ -426,6 +483,29 @@ contract PolicyService is
         _poolService.processSale(
             bundleNftId, 
             premium);
+    }
+
+    /// @dev transfer the premium to the wallets the premium is distributed to
+    function _transferFunds(
+        InstanceReader instanceReader,
+        NftId policyNftId,
+        NftId productNftId,
+        IPolicy.Premium memory premium
+    )
+        internal
+        virtual
+    {
+        TokenHandler tokenHandler = instanceReader.getComponentInfo(productNftId).tokenHandler;
+        address policyHolder = getRegistry().ownerOf(policyNftId);
+
+        (
+            NftId distributionNftId,
+            address distributionWallet,
+            address poolWallet,
+            address productWallet
+        ) = _getDistributionNftAndWallets(
+            instanceReader, 
+            productNftId);
 
         // TODO: centralize token handling (issue #471)
         // transfer premium amounts to target wallets