Default cancellation effective date

The insurer usually bases the default cancellation effective date on the type of cancellation, the regulations of the governing jurisdiction, and the line of coverage that is being canceled. For example, two policies in the same jurisdiction may require different notification periods due to differing lines of business. A commercial property policy may have different notification periods in adjacent jurisdictions. Non-payment may require only 10 days notification in one jurisdiction, but 30 days in another. In very limited conditions, the insurer can also cancel immediately.

The system allows the user to override the default cancellation effective date in all circumstances, except in the case of a flat cancellation. For example, in a cancellation initiated by the insurer, suppose that at least 30 days must elapse before the cancellation becomes effective. The default cancellation effective date reflects the regulatory requirements for notifying a customer that their policy is being canceled. Therefore, the user can override the cancellation effective date only by moving it further out, allowing more days to elapse before the cancellation becomes effective. In most cancellations initiated by the insured, the cancellation effective date can be moved further in or further out. The user can never override the cancellation effective date for a flat cancellation because the whole policy term has been canceled. The user must have the Cancellation override effective date permission. The code for this permission is cancelovereffdate.

The following table shows how some choices are configured in the default installation.

Source	Reason	Refund method	Default cancellation effective date
Insured	Insured’s request- (finance co. nonpay)	Pro rata	System’s current date*
Insured	Insured’s request- (N.O.C.)	Short rate	System’s current date*
Insured	No employees/operations	Pro rata	System’s current date*
Insured	Out of business/sold	Pro rata	System’s current date*
Insured	Policy not taken	Flat	The date the policy went into effect.
Insurer	Cancellation of underlying insurance	Pro rata	Calculated based on jurisdiction and line of business.*
Insurer	Condemned/unsafe	Pro rata	Calculated based on jurisdiction and line of business.*
Insurer	Non payment	Pro rata	Calculated based on jurisdiction and line of business.*
Insurer	Policy rewritten (mid-term)	Pro rata	System’s current date*
Insurer	Policy rewritten or replaced (flat cancel)	Flat	The date the policy went into effect.
Insurer	Fraud	Pro rata	Calculated based on jurisdiction and line of business.*

Note: “*” indicates that the user can override the default cancellation effective date.