@etherisc/gif-next 0.0.2-c17621f-221 → 0.0.2-c258ac8-869

package/contracts/product/PolicyService.sol

@@ -3,46 +3,41 @@ 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 {IAccountingService} from "../accounting/IAccountingService.sol";
+import {IComponentService} from "../shared/IComponentService.sol";
 import {IComponents} from "../instance/module/IComponents.sol";
+import {IDistributionService} from "../distribution/IDistributionService.sol";
+import {InstanceReader} from "../instance/InstanceReader.sol";
+import {InstanceStore} from "../instance/InstanceStore.sol";
 import {IInstance} from "../instance/IInstance.sol";
 import {IPolicy} from "../instance/module/IPolicy.sol";
+import {IPolicyHolder} from "../shared/IPolicyHolder.sol";
+import {IPolicyService} from "./IPolicyService.sol";
+import {IPoolService} from "../pool/IPoolService.sol";
+import {IPricingService} from "./IPricingService.sol";
+import {IRegistry} from "../registry/IRegistry.sol";
 
-import {TokenHandler} from "../shared/TokenHandler.sol";
-
-import {Amount, AmountLib} from "../type/Amount.sol";
-import {Timestamp, TimestampLib, zeroTimestamp} from "../type/Timestamp.sol";
-import {ObjectType, APPLICATION, COMPONENT, DISTRIBUTION, PRODUCT, POOL, POLICY, BUNDLE, CLAIM, PRICE} from "../type/ObjectType.sol";
+import {Amount} from "../type/Amount.sol";
 import {APPLIED, COLLATERALIZED, KEEP_STATE, CLOSED, DECLINED, PAID} from "../type/StateId.sol";
-import {NftId, NftIdLib} from "../type/NftId.sol";
+import {ContractLib} from "../shared/ContractLib.sol";
+import {NftId} from "../type/NftId.sol";
+import {ObjectType, ACCOUNTING, COMPONENT, DISTRIBUTION, PRODUCT, POOL, POLICY, PRICE} from "../type/ObjectType.sol";
+import {PolicyServiceLib} from "./PolicyServiceLib.sol";
 import {ReferralId} from "../type/Referral.sol";
+import {RiskId} from "../type/RiskId.sol";
+import {Service} from "../shared/Service.sol";
 import {StateId} from "../type/StateId.sol";
+import {Timestamp, TimestampLib} from "../type/Timestamp.sol";
+import {TokenHandler} from "../shared/TokenHandler.sol";
 import {VersionPart} from "../type/Version.sol";
 
-import {ComponentVerifyingService} from "../shared/ComponentVerifyingService.sol";
-import {IApplicationService} from "./IApplicationService.sol";
-import {IBundleService} from "../pool/IBundleService.sol";
-import {IClaimService} from "./IClaimService.sol";
-import {IComponentService} from "../shared/IComponentService.sol";
-import {IDistributionService} from "../distribution/IDistributionService.sol";
-import {InstanceReader} from "../instance/InstanceReader.sol";
-import {InstanceStore} from "../instance/InstanceStore.sol";
-import {IPolicyService} from "./IPolicyService.sol";
-import {IPoolService} from "../pool/IPoolService.sol";
-import {IPricingService} from "./IPricingService.sol";
 
 contract PolicyService is
-    ComponentVerifyingService, 
+    Service, 
     IPolicyService
 {
-    using NftIdLib for NftId;
-    using TimestampLib for Timestamp;
-
-    IApplicationService internal _applicationService;
+    IAccountingService private _accountingService;
     IComponentService internal _componentService;
-    IBundleService internal _bundleService;
-    IClaimService internal _claimService;
     IDistributionService internal _distributionService;
     IPoolService internal _poolService;
     IPricingService internal _pricingService;
@@ -56,18 +51,15 @@ contract PolicyService is
         initializer
     {
         (
-            address registryAddress,, 
-            //address managerAddress
-            address authority
-        ) = abi.decode(data, (address, address, address));
+            address authority,
+            address registry
+        ) = abi.decode(data, (address, address));
 
-        _initializeService(registryAddress, authority, owner);
+        __Service_init(authority, registry, owner);
 
         VersionPart majorVersion = getVersion().toMajorPart();
-        _applicationService = IApplicationService(getRegistry().getServiceAddress(APPLICATION(), majorVersion));
-        _bundleService = IBundleService(getRegistry().getServiceAddress(BUNDLE(), majorVersion));
+        _accountingService = IAccountingService(getRegistry().getServiceAddress(ACCOUNTING(), majorVersion));
         _componentService = IComponentService(getRegistry().getServiceAddress(COMPONENT(), majorVersion));
-        _claimService = IClaimService(getRegistry().getServiceAddress(CLAIM(), majorVersion));
         _poolService = IPoolService(getRegistry().getServiceAddress(POOL(), majorVersion));
         _distributionService = IDistributionService(getRegistry().getServiceAddress(DISTRIBUTION(), majorVersion));
         _pricingService = IPricingService(getRegistry().getServiceAddress(PRICE(), majorVersion));
@@ -80,26 +72,18 @@ contract PolicyService is
         NftId applicationNftId // = policyNftId
     )
         external
-        virtual override
+        virtual
+        nonReentrant()
     {
-        (NftId productNftId,, IInstance instance) = _getAndVerifyActiveComponent(PRODUCT());
-        InstanceReader instanceReader = instance.getInstanceReader();
+        // checks
+        (IInstance instance,,) = _getAndVerifyCallerForPolicy(applicationNftId);
 
         // check policy is in state applied
-        if (instanceReader.getPolicyState(applicationNftId) != APPLIED()) {
+        if (instance.getInstanceReader().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);
-        }
-        
-
+        // effects
         // store updated policy info
         instance.getInstanceStore().updatePolicyState(
             applicationNftId, 
@@ -115,41 +99,36 @@ contract PolicyService is
         Timestamp activateAt
     )
         external 
-        virtual override
+        virtual
+        nonReentrant()
+        returns (Amount premiumAmount)
     {
-        // check caller is registered product
-        (NftId productNftId,, IInstance instance) = _getAndVerifyActiveComponent(PRODUCT());
-        InstanceReader instanceReader = instance.getInstanceReader();
+        // checks
+        (
+            IInstance instance,
+            NftId productNftId,
+            IPolicy.PolicyInfo memory applicationInfo
+        ) = _getAndVerifyCallerForPolicy(applicationNftId);
 
         // check policy is in state applied
+        InstanceReader instanceReader = instance.getInstanceReader();
         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);
-        }
-        
+        // effects
         // actual collateralizaion
         _poolService.lockCollateral(
             instance,
-            address(instanceReader.getComponentInfo(productNftId).token),
+            address(instanceReader.getToken(productNftId)),
             productNftId,
             applicationNftId,
             applicationInfo.bundleNftId,
             applicationInfo.sumInsuredAmount);
 
         // optional activation of policy
-        if(activateAt > zeroTimestamp()) {
-            applicationInfo = _activate(
-                applicationNftId, 
-                applicationInfo, 
-                activateAt);
+        if(activateAt.gtz()) {
+            applicationInfo = _activate(applicationNftId, applicationInfo, activateAt);
         }
 
         // update policy and set state to collateralized
@@ -159,32 +138,44 @@ contract PolicyService is
             COLLATERALIZED());
 
         // calculate and store premium
+        RiskId riskId = applicationInfo.riskId;
+        NftId bundleNftId = applicationInfo.bundleNftId;
+
         IPolicy.PremiumInfo memory premium = _pricingService.calculatePremium(
             productNftId,
-            applicationInfo.riskId,
+            riskId,
             applicationInfo.sumInsuredAmount,
             applicationInfo.lifetime,
             applicationInfo.applicationData,
-            applicationInfo.bundleNftId,
+            bundleNftId,
             applicationInfo.referralId);
 
+        premiumAmount = premium.fullPremiumAmount;
         instance.getInstanceStore().createPremium(
             applicationNftId,
             premium);
 
-        // update referral counter 
+        // update referral counter if product has linked distributino component
         {
             IComponents.ProductInfo memory productInfo = instanceReader.getProductInfo(productNftId);
-            _distributionService.processReferral(
-                productInfo.distributionNftId, 
-                applicationInfo.referralId);
+            if (productInfo.hasDistribution) {    
+                _distributionService.processReferral(
+                    productInfo.distributionNftId, 
+                    applicationInfo.referralId);
+            }
         }
-        
-        // TODO add calling pool contract if it needs to validate application
 
-        // TODO: add logging
+        // link policy to risk and bundle
+        NftId poolNftId = getRegistry().getParentNftId(bundleNftId);
+        instance.getRiskSet().linkPolicy(productNftId, riskId, applicationNftId);
+        instance.getBundleSet().linkPolicy(poolNftId, bundleNftId, applicationNftId);
+
+        // log policy creation before interactions with token and policy holder
+        emit LogPolicyServicePolicyCreated(applicationNftId, premium.premiumAmount, activateAt);
 
-        // TODO: add callback IPolicyHolder.policyActivated() if applicable
+        // interactions
+        // callback to policy holder if applicable
+        _policyHolderPolicyActivated(applicationNftId, activateAt);
     }
 
 
@@ -195,29 +186,48 @@ contract PolicyService is
     )
         external 
         virtual
+        nonReentrant()
     {
-        // check caller is registered product
-        (,, IInstance instance) = _getAndVerifyActiveComponent(PRODUCT());
-        InstanceReader instanceReader = instance.getInstanceReader();
-        StateId stateId = instanceReader.getPolicyState(policyNftId);
+        // checks
+        (
+            IInstance instance,
+            NftId productNftId,
+            IPolicy.PolicyInfo memory policyInfo
+        ) = _getAndVerifyCallerForPolicy(policyNftId);
 
-        // check policy is in state collateralized or active
-        if (!(stateId == COLLATERALIZED())) {
+        // check policy is in state collateralized
+        InstanceReader instanceReader = instance.getInstanceReader();
+        if (instanceReader.getPolicyState(policyNftId) != COLLATERALIZED()) {
             revert ErrorPolicyServicePolicyStateNotCollateralized(policyNftId);
         }
 
-        // check if premium is already collected
+        // check if premium has already been collected
         if (instanceReader.getPremiumInfoState(policyNftId) == PAID()) {
             revert ErrorPolicyServicePremiumAlreadyPaid(policyNftId);
         }
 
-        IPolicy.PolicyInfo memory policyInfo = instanceReader.getPolicyInfo(policyNftId);
-        IPolicy.PremiumInfo memory premium = instanceReader.getPremiumInfo(policyNftId); 
-        
-        _processPremium(
-            instance,
-            policyNftId,
-            policyInfo,
+        // check funds and allowance of policy holder
+        IPolicy.PremiumInfo memory premium = instanceReader.getPremiumInfo(policyNftId);
+        instanceReader.getTokenHandler(
+            productNftId).checkBalanceAndAllowance(
+                getRegistry().ownerOf(policyNftId), 
+                premium.premiumAmount, 
+                false);
+
+        // )
+        // _checkPremiumBalanceAndAllowance(
+        //     tokenHandler.TOKEN(), 
+        //     address(tokenHandler),
+        //     getRegistry().ownerOf(policyNftId), 
+        //     premium.premiumAmount);
+
+        // effects
+        _processSale(
+            instanceReader, 
+            instance.getInstanceStore(), 
+            productNftId, 
+            policyInfo.bundleNftId, 
+            policyInfo.referralId, 
             premium);
 
         // optionally activate policy
@@ -228,120 +238,163 @@ contract PolicyService is
         instance.getInstanceStore().updatePolicy(policyNftId, policyInfo, KEEP_STATE());
         instance.getInstanceStore().updatePremiumState(policyNftId, PAID());
 
-        // TODO: add logging
-
-        _transferFunds(instanceReader, policyNftId, policyInfo.productNftId, premium);
+        // log premium collection before interactions with token
+        emit LogPolicyServicePolicyPremiumCollected(policyNftId, premium.premiumAmount);
 
-        // TODO: add callback IPolicyHolder.policyActivated() if applicable
+        // interactions
+        _transferPremiumAmounts(instanceReader, policyNftId, policyInfo.productNftId, premium);
     }
 
+
     /// @inheritdoc IPolicyService
-    function activate(NftId policyNftId, Timestamp activateAt) public override {
-        // check caller is registered product
-        (,, IInstance instance) = _getAndVerifyActiveComponent(PRODUCT());
-        InstanceReader instanceReader = instance.getInstanceReader();
+    function activate(NftId policyNftId, Timestamp activateAt)
+        external
+        virtual
+        nonReentrant()
+    {
+        // checks
+        (
+            IInstance instance,,
+            IPolicy.PolicyInfo memory policyInfo
+        ) = _getAndVerifyCallerForPolicy(policyNftId);
 
-        IPolicy.PolicyInfo memory policyInfo = instanceReader.getPolicyInfo(policyNftId);
+        // effects
         policyInfo = _activate(policyNftId, policyInfo, activateAt);
-
         instance.getInstanceStore().updatePolicy(policyNftId, policyInfo, KEEP_STATE());
 
-        // TODO: add logging
+        // log policy activation before interactions with policy holder
+        emit LogPolicyServicePolicyActivated(policyNftId, activateAt);
 
-        // TODO: add callback IPolicyHolder.policyActivated() if applicable
+        // interactions
+        // callback to policy holder if applicable
+        _policyHolderPolicyActivated(policyNftId, activateAt);
     }
 
-
     /// @inheritdoc IPolicyService
-    function expire(
+    function adjustActivation(
         NftId policyNftId,
-        Timestamp expireAt
+        Timestamp newActivateAt
     )
         external
-        override
         virtual
-        returns (Timestamp expiredAt)
+        nonReentrant()
     {
-        (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);
-        }
+        // checks
+        (
+            IInstance instance,,
+            IPolicy.PolicyInfo memory policyInfo
+        ) = _getAndVerifyCallerForPolicy(policyNftId);
 
-        // check policy is active
-        StateId policyState = instanceReader.getPolicyState(policyNftId);
-        if (!_policyHasBeenActivated(policyState, policyInfo)) {
-            revert ErrorPolicyServicePolicyNotActive(policyNftId, policyState);
+        if (policyInfo.activatedAt.eqz()) {
+            revert ErrorPolicyServicePolicyNotActivated(policyNftId);
         }
 
-        // set return value to provided timestamp
-        expiredAt = expireAt;
-
-        // update expiredAt to current block timestamp if not set
-        if (expiredAt.eqz()) {
-            expiredAt = TimestampLib.blockTimestamp();
+        if (newActivateAt < TimestampLib.blockTimestamp()) {
+            revert ErrorPolicyServicePolicyActivationTooEarly(policyNftId, TimestampLib.blockTimestamp(), newActivateAt);
         }
 
-        // check expiredAt represents a valid expiry time
-        if (expiredAt >= policyInfo.expiredAt) {
-            revert ErrorPolicyServicePolicyExpirationTooLate(policyNftId, policyInfo.expiredAt, expireAt);
-        }
-        if (expiredAt < TimestampLib.blockTimestamp()) {
-            revert ErrorPolicyServicePolicyExpirationTooEarly(policyNftId, TimestampLib.blockTimestamp(), expireAt);
+        if (newActivateAt > policyInfo.expiredAt) {
+            revert ErrorPolicyServicePolicyActivationTooLate(policyNftId, policyInfo.expiredAt, newActivateAt);
         }
 
-        // update policyInfo with new expiredAt timestamp
-        policyInfo.expiredAt = expiredAt;
+        // effects
+        policyInfo.activatedAt = newActivateAt;
         instance.getInstanceStore().updatePolicy(policyNftId, policyInfo, KEEP_STATE());
 
-        emit LogPolicyServicePolicyExpirationUpdated(policyNftId, expiredAt);
+        // log policy activation before interactions with policy holder
+        emit LogPolicyServicePolicyActivatedUpdated(policyNftId, newActivateAt);
+
+        // interactions
+        // callback to policy holder if applicable
+        _policyHolderPolicyActivated(policyNftId, newActivateAt);
+    }
+
+
+    /// @inheritdoc IPolicyService
+    function expire(
+        NftId policyNftId,
+        Timestamp expireAt
+    )
+        external
+        virtual
+        nonReentrant()
+        returns (Timestamp expiredAt)
+    {
+        // checks
+        (
+            IInstance instance,,
+            IPolicy.PolicyInfo memory policyInfo
+        ) = _getAndVerifyCallerForPolicy(policyNftId);
+
+        // more checks, effects + interactions
+        return _expire(
+            instance,
+            policyNftId,
+            policyInfo,
+            expireAt
+        );
+    }
+
+
+    /// @inheritdoc IPolicyService
+    function expirePolicy(
+        IInstance instance,
+        NftId policyNftId,
+        Timestamp expireAt
+    )
+        external
+        virtual
+        nonReentrant()
+        returns (Timestamp expiredAt)
+    {
+        // checks
+        _checkNftType(policyNftId, POLICY());
+        IPolicy.PolicyInfo memory policyInfo = instance.getInstanceReader().getPolicyInfo(
+            policyNftId);
 
-        // TODO: add callback IPolicyHolder.policyExpired() if applicable
+        // more checks, effects + interactions
+        return _expire(
+            instance,
+            policyNftId,
+            policyInfo,
+            expireAt
+        );
     }
 
 
+    /// @inheritdoc IPolicyService
     function close(
         NftId policyNftId
     )
         external 
-        override
+        virtual
+        nonReentrant()
     {
-        (,, IInstance instance) = _getAndVerifyActiveComponent(PRODUCT());
+        // checks
+        (
+            IInstance instance,
+            NftId productNftId,
+            IPolicy.PolicyInfo memory policyInfo
+        ) = _getAndVerifyCallerForPolicy(policyNftId);
         InstanceReader instanceReader = instance.getInstanceReader();
 
-        // check that policy has been activated
-        IPolicy.PolicyInfo memory policyInfo = instanceReader.getPolicyInfo(policyNftId);
-        StateId policyState = instanceReader.getPolicyState(policyNftId);
-        if (!_policyHasBeenActivated(policyState, policyInfo)) {
-            revert ErrorPolicyServicePolicyNotActive(policyNftId, policyState);
+        // check policy is in a closeable state
+        if (!PolicyServiceLib.policyIsCloseable(instanceReader, policyNftId)) {
+            revert ErrorPolicyServicePolicyNotCloseable(policyNftId);
         }
 
-        // check that policy has not already been closed
-        if (policyInfo.closedAt.gtz()) {
-            revert ErrorPolicyServicePolicyAlreadyClosed(policyNftId);
-        }
-
-        // check that policy does not have any open claims
-        if (policyInfo.openClaimsCount > 0) {
-            revert ErrorPolicyServiceOpenClaims(policyNftId, policyInfo.openClaimsCount);
-        }
+        // check that policy has been activated
+        RiskId riskId = policyInfo.riskId;
+        NftId bundleNftId = policyInfo.bundleNftId;
 
-        // TODO consider to allow for underpaid premiums (with the effects of reducing max payouts accordingly)
-        // TODO consider to remove requirement for fully paid premiums altogether
-        if (! instanceReader.getPremiumInfoState(policyNftId).eq(PAID())) {
+        if (instanceReader.getPremiumInfoState(policyNftId) != PAID()) {
             revert ErrorPolicyServicePremiumNotPaid(policyNftId, policyInfo.premiumAmount);
         }
 
+        // effects
         // release (remaining) collateral that was blocked by policy
         _poolService.releaseCollateral(
             instance, 
-            address(instanceReader.getComponentInfo(policyInfo.productNftId).token),
             policyNftId, 
             policyInfo);
 
@@ -351,45 +404,48 @@ contract PolicyService is
         policyInfo.closedAt = TimestampLib.blockTimestamp();
         instance.getInstanceStore().updatePolicy(policyNftId, policyInfo, CLOSED());
 
-        // TODO add logging
-    }
+        // unlink policy from risk and bundle
+        NftId poolNftId = getRegistry().getParentNftId(bundleNftId);
+        instance.getRiskSet().unlinkPolicy(productNftId, riskId, policyNftId);
+        instance.getBundleSet().unlinkPolicy(poolNftId, bundleNftId, policyNftId);
 
+        emit LogPolicyServicePolicyClosed(policyNftId);
+    }
 
-    /// @dev calculates the premium and updates all counters in the other services
-    function _processPremium(
+    /// @dev shared functionality for expire() and policyExpire().
+    function _expire(
         IInstance instance,
-        NftId applicationNftId,
-        IPolicy.PolicyInfo memory applicationInfo,
-        IPolicy.PremiumInfo memory premium
+        NftId policyNftId,
+        IPolicy.PolicyInfo memory policyInfo,
+        Timestamp expireAt
     )
         internal
-        virtual
+        returns (Timestamp)
     {
-        NftId productNftId = applicationInfo.productNftId;
-        InstanceReader instanceReader = instance.getInstanceReader();
+        PolicyServiceLib.checkExpiration(
+            expireAt,
+            policyNftId,
+            instance.getInstanceReader().getPolicyState(policyNftId),
+            policyInfo);
 
-        // check if premium balance and allowance of policy holder is sufficient
-        {
-            TokenHandler tokenHandler = _getTokenHandler(instanceReader, productNftId);
-            address policyHolder = getRegistry().ownerOf(applicationNftId);
-        
-            _checkPremiumBalanceAndAllowance(
-                tokenHandler.getToken(), 
-                address(tokenHandler),
-                policyHolder, 
-                premium.premiumAmount);
+        // effects
+        // update policyInfo with new expiredAt timestamp
+        if (expireAt.gtz()) {
+            policyInfo.expiredAt = expireAt;
+        } else {
+            policyInfo.expiredAt = TimestampLib.blockTimestamp();
         }
+        instance.getInstanceStore().updatePolicy(policyNftId, policyInfo, KEEP_STATE());
 
-        // update the counters
-        _processSale(
-            instanceReader, 
-            instance.getInstanceStore(), 
-            productNftId, 
-            applicationInfo.bundleNftId, 
-            applicationInfo.referralId, 
-            premium);
+        emit LogPolicyServicePolicyExpirationUpdated(policyNftId, policyInfo.expiredAt);
+
+        // interactions
+        // callback to policy holder if applicable
+        _policyHolderPolicyExpired(policyNftId, policyInfo.expiredAt);
+        return policyInfo.expiredAt;
     }
 
+
     function _activate(
         NftId policyNftId, 
         IPolicy.PolicyInfo memory policyInfo,
@@ -428,21 +484,23 @@ contract PolicyService is
         internal
         virtual
     {
-        (NftId distributionNftId, , , ) = _getDistributionNftAndWallets(
+        (NftId distributionNftId,,,) = _getDistributionNftAndWallets(
             instanceReader, 
             productNftId);
 
         // update product fees, distribution and pool fees 
-        _componentService.increaseProductFees(
+        _accountingService.increaseProductFees(
             instanceStore, 
             productNftId, 
             premium.productFeeVarAmount + premium.productFeeFixAmount);
 
         // update distribution fees and distributor commission and pool fees 
-        _distributionService.processSale(
-            distributionNftId, 
-            referralId, 
-            premium);
+        if (!distributionNftId.eqz()) { // only call distribution service if a distribution component is connected to the product
+            _distributionService.processSale(
+                distributionNftId, 
+                referralId, 
+                premium);
+        }
 
         // update pool and bundle fees 
         _poolService.processSale(
@@ -452,7 +510,7 @@ contract PolicyService is
 
 
     /// @dev transfer the premium to the wallets the premium is distributed to
-    function _transferFunds(
+    function _transferPremiumAmounts(
         InstanceReader instanceReader,
         NftId policyNftId,
         NftId productNftId,
@@ -461,7 +519,6 @@ contract PolicyService is
         internal
         virtual
     {
-        TokenHandler tokenHandler = _getTokenHandler(instanceReader, productNftId);
         address policyHolder = getRegistry().ownerOf(policyNftId);
 
         (
@@ -473,72 +530,78 @@ contract PolicyService is
             instanceReader, 
             productNftId);
 
-        tokenHandler.collectTokensToThreeRecipients(
-            policyHolder,
-            productWallet,
-            premium.productFeeAmount,
-            distributionWallet,
-            premium.distributionFeeAndCommissionAmount,
-            poolWallet,
-            premium.poolPremiumAndFeeAmount);
-    }
+        // step 1: collect premium amount from policy holder
+        TokenHandler tokenHandler = instanceReader.getTokenHandler(productNftId);
+        tokenHandler.pullToken(policyHolder, premium.premiumAmount);
 
+        // step 2: push distribution fee to distribution wallet
+        if (premium.distributionFeeAndCommissionAmount.gtz()) {
+            tokenHandler.pushToken(distributionWallet, premium.distributionFeeAndCommissionAmount);
+        }
 
-    /// @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
+        // step 3: push pool fee, bundle fee and pool premium to pool wallet
+        if (premium.poolPremiumAndFeeAmount.gtz()) {
+            tokenHandler.pushToken(poolWallet, premium.poolPremiumAndFeeAmount);
+        }
+    }
+    function _policyHolderPolicyActivated(
+        NftId policyNftId,
+        Timestamp activateAt
     )
         internal
-        view
-        returns (bool)
+        virtual
     {
-        if (policyState != COLLATERALIZED()) { return false; } 
-        if (TimestampLib.blockTimestamp() < policyInfo.activatedAt) { return false; } 
-        return true;
+        // immediately return if policy is not activated
+        if (activateAt.eqz()) {
+            return;
+        }
+
+        // get policy holder address
+        IPolicyHolder policyHolder = _getPolicyHolder(policyNftId);
+
+        // execute callback if policy holder implements IPolicyHolder
+        if (address(policyHolder) != address(0)) {
+            policyHolder.policyActivated(policyNftId, activateAt);
+        }
     }
 
 
-    /// @dev checks the balance and allowance of the policy holder
-    function _checkPremiumBalanceAndAllowance(
-        IERC20Metadata token,
-        address tokenHandlerAddress, 
-        address policyHolder, 
-        Amount premiumAmount
+    function _policyHolderPolicyExpired(
+        NftId policyNftId,
+        Timestamp expiredAt
     )
         internal
         virtual
-        view
     {
-        uint256 premium = premiumAmount.toInt();
-        uint256 balance = token.balanceOf(policyHolder);
-        uint256 allowance = token.allowance(policyHolder, tokenHandlerAddress);
-    
-        if (balance < premium) {
-            revert ErrorPolicyServiceBalanceInsufficient(policyHolder, premium, balance);
+        // immediately return if policy is not activated
+        if (expiredAt.eqz()) {
+            return;
         }
 
-        if (allowance < premium) {
-            revert ErrorPolicyServiceAllowanceInsufficient(policyHolder, tokenHandlerAddress, premium, allowance);
+        // get policy holder address
+        IPolicyHolder policyHolder = _getPolicyHolder(policyNftId);
+
+        // execute callback if policy holder implements IPolicyHolder
+        if (address(policyHolder) != address(0)) {
+            policyHolder.policyExpired(policyNftId, expiredAt);
         }
     }
 
 
-    function _getTokenHandler(
-        InstanceReader instanceReader,
-        NftId productNftId
-    )
+    function _getPolicyHolder(NftId policyNftId)
         internal 
-        virtual
         view 
-        returns (
-            TokenHandler tokenHandler
-        )
+        returns (IPolicyHolder policyHolder)
     {
-        tokenHandler = instanceReader.getComponentInfo(productNftId).tokenHandler;
+        address policyHolderAddress = getRegistry().ownerOf(policyNftId);
+        policyHolder = IPolicyHolder(policyHolderAddress);
+
+        if (!ContractLib.isPolicyHolder(policyHolderAddress)) {
+            policyHolder = IPolicyHolder(address(0));
+        }
     }
 
+
     function _getDistributionNftAndWallets(
         InstanceReader instanceReader,
         NftId productNftId
@@ -553,17 +616,45 @@ contract PolicyService is
         )
     {
         IComponents.ProductInfo memory productInfo = instanceReader.getProductInfo(productNftId);
-        distributionNftId = productInfo.distributionNftId;
-        distributionWallet = instanceReader.getComponentInfo(distributionNftId).wallet;
-        poolWallet = instanceReader.getComponentInfo(productInfo.poolNftId).wallet;
-        productWallet = instanceReader.getComponentInfo(productNftId).wallet;
+        productWallet = instanceReader.getComponentInfo(productNftId).tokenHandler.getWallet();
+        poolWallet = instanceReader.getComponentInfo(productInfo.poolNftId).tokenHandler.getWallet();
+
+        if (productInfo.hasDistribution) {
+            distributionNftId = productInfo.distributionNftId;
+            distributionWallet = instanceReader.getComponentInfo(distributionNftId).tokenHandler.getWallet();
+        }
     }
 
 
-    function _getAndVerifyInstanceAndProduct() internal view returns (Product product) {
-        IRegistry.ObjectInfo memory productInfo;
-        (, productInfo,) = _getAndVerifyActiveComponent(PRODUCT());
-        product = Product(productInfo.objectAddress);
+    function  _getAndVerifyCallerForPolicy(NftId policyNftId)
+        internal
+        virtual
+        view
+        returns (
+            IInstance instance,
+            NftId productNftId,
+            IPolicy.PolicyInfo memory policyInfo
+        )
+    {
+        (
+            IRegistry.ObjectInfo memory productInfo, 
+            address instanceAddress
+        ) = ContractLib.getAndVerifyComponent(
+            getRegistry(), 
+            msg.sender, // caller contract 
+            PRODUCT(), // caller must be product
+            true); // only active caller
+
+        productNftId = productInfo.nftId; // calling product nft id
+        instance = IInstance(instanceAddress);
+        policyInfo = instance.getInstanceReader().getPolicyInfo(policyNftId);
+
+        if (policyInfo.productNftId != productNftId) {
+            revert ErrorPolicyServicePolicyProductMismatch(
+                policyNftId, 
+                productNftId,
+                policyInfo.productNftId);
+        }
     }