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 "Actions."
- 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. Generating the Transaction
- Selecting "Combine all receivables and payables" will streamline the process.
- Leaving "Combine all receivables and payables" unchecked will create an AR and AP for each premium/non-premium item (usually for itemized invoices/issue payments).
- Generate the transaction to proceed.
4. Adjusting Receivables and Payables
- Remove the receivable and payable entries in cases where the AR and AP are managed directly between the MGA and the Finance Co.
- Adjust the total amount to ensure all funds go to the finance company.
5. Finalizing the Cancellation
- Verify the checksum to ensure accurate calculations.
- Cancel the policy and close the pop-up.
6. Issuing Payment to the Finance Company
- Navigate to "Documents" (top navigation menu).
- Select "Issue Payment" > "Add New."
- Select the finance company as the recipient.
- Select the unearned commission amount.
- Choose the agent and exclude remittance.
- When ready, record the payment to the finance company.
This simplifies the process, creates a clean and organized endorsement, and ensures everyone stays informed with minimal confusion.