Additional FAQ Resources
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      2. Additional FAQ Resources

      Cancel A Policy Involving a Finance Company

      Here’s the step-by-step guide for processing the cancellation and cancellation endorsement:

      Step 1: Cancel the Policy

      1. Navigate to the Policy:
        • Open the insured’s profile and locate the policy to be canceled.
      2. Access the Cancellation Option:
        • Click on Actions in the top right corner and select Cancel Policy from the dropdown menu.
      3. Set the Cancellation Date:
        • The system will prefill today’s date as the cancellation date. If this needs to be changed, override the date. For this example, set the cancellation date to 1/17/2025.
      4. Enter Cancellation Premium and Fees:
        • Enter the cancellation premium as - $6,660.00.
        • Click Add Item, then select Fee/Tax.
        • Change the fee type from Agency Fee to Surplus Lines Tax and input - $161.00.
        • Repeat this step for any additional fees or taxes being returned.
        • Ensure the Combine Receivables and Payables option is selected to streamline the transaction into a single entry.
      5. Cancel the Policy:
        • Click Cancel Policy to officially mark the policy as canceled.

      Step 2: Process the Cancellation Endorsement

      1. Access Endorsement Details:
        • Go to either the General or Billing tab.
        • Click on Endorsements/Taxes/Fees to view the transaction details.
        • Locate the cancellation transaction and click Actions on the left of the transaction.
        • Select Edit Endorsement/Fee from the dropdown menu.
      2. Enter the Negative Endorsement:
        • Enter the negative endorsement for the financing/Direct Bill.
        • Check the Proc by Agency checkbox to indicate that the agency is handling the transaction for the finance company.

      Step 3: Adjust Receivables and Payables

      1. Set the Receivable:
        • Set the receivable to the finance company, including the return premium received from the carrier and the taxes.
        • Enter a negative return premium amount to match the payable from the carrier.
        • Remove the payable to the finance company to ensure the transaction balances correctly.
      2. Generate the Transaction:
        • After making the adjustments, click Generate Transaction to finalize the endorsement.

      Step 4: Issue Payments and Invoices

      1. Create a Payment to the Carrier:
        • Navigate to the Documents tab and select Issue Payments.
        • Create a payment to the carrier for the adjusted net amount, factoring in the return premium and taxes.
      2. Create a Negative Invoice for the Finance Company:
        • In the Documents tab, go to Invoices/Receipts and create a negative invoice for the finance company.
        • This negative invoice will generate a credit in the system, allowing you to process a refund to the finance company for the return premium and taxes.

      Step 5: Reconcile Transactions

      1. Verify the Transactions:
        • Ensure all receivables and payables align with the carrier’s endorsement details.
        • Confirm that all payments, credits, and adjustments are properly accounted for in the system.
      2. Reconcile the Transactions:
        • Complete the reconciliation process to finalize the financial records.

      If you need further assistance with this process or have any questions, please don’t hesitate to reach out. You can schedule a one-on-one training session with me by emailing richard@momentumamp.com, and I’d be happy to guide you through the steps in detail.