How to Cancel a Policy

1️⃣ Locate the Policy

1. Use Dynamic Search to find the insured.

2. Open the insured’s profile and go to the Policies tab.

3. Click on the Policy Number to open the policy details screen.

2️⃣ Cancel the Policy in AMS

For an Immediate Cancellation

1. In the policy details screen, click Actions (upper-right).

2. Select Cancel Policy from the dropdown.

3. Enter the Cancellation Effective Date and Reason.

4. Enter the return premium (as a negative amount) and add or adjust any related fees/taxes.

5. Click Cancel Policy at the bottom of the screen to finalize.

6. The policy status will update to Canceled in AMS.

Note: This process adjusts both the policy status and the premium in a single step. If the premium change is skipped, you will need to return to the Billing tab to manually process a premium endorsement.

For a Pending Cancellation (Notice of Cancellation)

1. From the left navigation, go to Pending Cancels.

2. Find the policy and enter the Pending Cancel Date and Reason.

3. The system will automatically cancel the policy at 12:01 AM on the date entered.

   • Note: When the policy auto-cancels from a pending cancel, no premium endorsement is generated. You will still need to process a premium endorsement manually (see Step 3).

3️⃣ Process the Premium Endorsement

    From the policy details, go to the Billing tab.

• Click Endorsements / Fees and Taxes.

• Locate the existing Cancel transaction created when the policy was canceled.

• In the Actions menu next to this transaction, select Edit Endorsement/Fee.

• Enter the return premium as a negative amount in the base premium field.

• Adjust for taxes, fees, or penalties based on the cancellation type:

  • Flat Cancellation – Return full premium, remove all fees/taxes.

  • Pro-Rata – Return unearned portion of premium and related taxes.

  • Short Rate – Return unearned portion minus penalty; document the calculation in the notes.

• Click Generate Transaction and verify the Checksum is zero before saving.

4️⃣ Process Refund or Adjustment

• Once the negative receivable and negative payable are generated from the cancellation or negative endorsement:

  • Go to the Documents tab in the insured’s profile.

  • Create an invoice for the negative receivable — this will automatically save as a credit payment in Momentum AMS and allow you to process the refund to the insured. For full instructions, see Refunds and Adjustments.

  • Create an “Issue Payment” for the negative payable — this will be for the net return premium owed back to the carrier or MGA and will reconcile the negative commission on the transaction.

• For Direct Bill Policies

  • The agency does not issue the refund. Notify the carrier so they can process the refund directly with the insured.

5️⃣ Document the Cancellation

1. From the insured’s Activity History → Notes, click Add New.

2. Include:

   • Cancellation type, effective date, and reason

   • Refund details (if applicable)

   • Carrier confirmation or reference number

3. Upload supporting documents (signed cancellation request, carrier notice, etc.) to Documents → Files.

4. Link the note to the Service Request if applicable.

✅ Best Practices

• Always confirm written cancellation requests before processing.

• Use Pending Cancels to track upcoming cancellations and reduce reinstatement issues.

• If premium financed, notify the finance company immediately.

• For short rate cancellations, note the penalty percentage and calculation for audit purposes.