This is simply the passive voice of the verb + should. It isn't past tense More information on passive voice
We generate the password (active verb, "to generate)
The password is generated. (passive verb "to be generated")
The password should be generated (passive verb + should "should be generated")
I make the tiramisu.
The tiramisu is made (by me).
The tiramisu should be made.
Of course, this can all be past tense:
I left the package.
The package was left.
The package should have been left.
He will forget the incident
The incident will be forgotten
The incident should be forgotten.
Or any other verb tense. You just modify the "to be" verb. Note that "should" adds its own spin on the verb tense. "Should" talks about future expectation, and "should have" talks about past expectation. More info