This guide outlines the steps to cancel an agency-billed policy with outside financing. In this case, the MGA/Carrier & Finance company manages unearned premiums, fees, and taxes, while the agency handles only the unearned commissions.
1. Initiating the Cancellation
- Within the policy details or from the left of the policy in a policy list, select Action
- Select "cancel policy" in the actions menu.
- Enter the reason for cancellation.
- Input the cancellation unearned premium; the system will automatically mark it as unearned.
- select Cancel Policy
2. Adding Additional Fees/Taxes
- Select "add item fee/tax" - always to the right of the Premium line item
- Specify the type of fee/tax (e.g., surplus lines tax).
- Manually input a negative value to mark it as unearned.
3. Geneterate the transaction
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Selecting "combine all receivables and payables" will streamline the process.
- Leave "combine all receivables and payables" unchecked will createan AR and AP for each premium/non-premium (usually for itmimed invoices/issuepayments)
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Generate the transaction to proceed.
4. Adjusting Receivables and Payables
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Remove the receivable and payable entries in these cases where the the AR and AP are managed rather directly between the MGA and the Fianace Co.
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Adjust the total amount to ensure all funds go to the finance company.
5. Finalizing the Cancellation
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Verify the checksum sanity to ensure accurate calculations.
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Cancel the policy and close the pop-up.
6. Issuing Payment to the Finance Company
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Navigate to documents (top navigation menu)
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Select 'Issue Payment > "add new".
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Select the finance company as the recipient.
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Select the unearned commission amount.
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Choose the agent and exclude remittance.
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When ready, record the payment to the finance company.
This simplifies the process, creates a clean and organized endorsement, and ensures everyone stays on the same page with minimal confusion.
Link to Loom:
https://loom.com/share/be8bf9b0397349d6965c7f9117fe20c1?src=composer