A policy can be cancelled by registered letter for the following reasons:

 

• Nonpayment
• Underwriting reasons
• Claims frequency
• Other

 

 

When a policy is sent on a registered letter for cancellation and the client is subsequently reinstated, our system now requires that:

 

• Time on risk is collected.
• The full payment for the remainder of that term is collected.

The system will automatically require that full payment be collected and there will no longer be an option to put them back onto monthly pay.

 

What you need to know moving forward

 

• How our system works for registered letters issued for non-payment also impacts registered letters issued for underwriting reasons. This was an unintended side effect of our recent release. For example, if one of our carriers issued a registered letter to collect information from a customer (which the customer didn’t provide in time), our system will switch the customer to annual payments.
• We suggest closely monitoring underwriting requests so that registered letters aren’t issued.
   This way, their payments won’t be switched to annual payment as a registered letter won’t be issued.

 

How our system collects time on risk and full payment for policies on registered letters

 

Time on risk

• Time on risk is set to collect from the payment processor on the date the registered letter is issued and put on hold until released by the broker to collect. The date to collect can be amended if required.

Reinstatement

• If a reinstatement is submitted into the platform, then the payment for the remaining term balance is set as the date the reinstatement was transacted. It is also put on hold until the broker amends the payment date to collect (if required) and remove the hold.

Renewals*

Renewals are set to annual pay going forward, as the system has always done. To mitigate this issue from occurring more often than necessary, we would suggest holding off on sending registered letters until after you have exhausted all attempts to contact them.

*Renewal exception - Agile Sprint:  If the renewal is present when the registered letter is sent and the policy is then reinstated, the policy payments will continue to be collected monthly for that renewal term, but will be annual for the current term. If the renewal is NOT present, the policy will switch to annual pay. When you’re reinstating the policy, review the payment plan for that renewal to manually switch it to annual pay as the policy will likely be on monthly pay.

 

 

 

 

 

• In the client's profile in bond, open the policy that will be cancelled and click 'Reg Letter' from the policy actions panel.
• A pop up will open to capture the reason for cancellation. If cancelling for nonpayment, click nonpayment. 

 

 

Click Submit and the pop up will close. The following has now taken place:

 

In the platform

 

• An open activity has been created 'Policy is pending cancellation by registered letter. Waiting on underwriter.'
• Request has been sent to insurer to request a registered letter be sent to the client.
• Some action buttons are now greyed out (Cancel, Reg Letter, Change Policy).
• All unpaid payments have been put on hold.
• The TOR (time on risk) will be reflected in the Payments screen and will be on HOLD, until released by you.
• A message will appear in the policy section window advising the policy is pending cancellation via registered letter.

 

The insurers

 

• The insurer will receive the request and mail a registered letter to the client.
• After the registered letter has been actioned by the insurer, the activity abeyance date will update to the cancellation date and this will also reflect on the Pending Cancellation verbiage.
•  The activity will auto close once the cancellation date has been reached.

 

PLEASE NOTE: Registered letters and reinstatement requests will only be actioned between business hours of the insurer. If a reinstatement request is sent outside business hours this will not be actioned and may cause the policy to cancel (Example: Reinstatement requested on Saturday, policy set to cancel 12:01am Monday morning - The policy will auto cancel before the underwriter can action the reinstatement request and cannot be uncancelled in bond)

 

When the registered letter is actioned by the insurer, the profile in bond will reflect this:

 

• There will be a refund or TOR (time on risk balance) on the Payments screen.
• The CAN (cancel) transaction will show on the Transaction Summary screen.
• Underwriting tab shows a Cancellation version. 
• The cancellation document from the insurer is available under Policy Documents.
• An activity will show the policy is cancelled by registered letter.
• The Reinstate icon on the right-hand policy actions panel will be available.
• The message/details in the Policy Details overview screen in bond reflects cancellation date and is in yellow.

 

Once the date for Cancellation by Registered letter comes, the policy will be cancelled and the platform will update to reflect the cancelled status.

 

• The open activity for 'Policy is pending cancellation by registered letter. Waiting on underwriter.' will close.
• Some action buttons are now greyed out (Cancel, Reg Letter, Change Policy).
• The outstanding TOR (time on risk) will be reflected in the Payments screen and will be on HOLD, until released by you. 
• The orange verbiage regarding the Pending Cancellation will show in Red.
• The Cancellation version will show in the Policy Documents screen.
• The Cancellation version will show in the Underwriting screen. 

 

 

 

• If the Reinstate icon is grey in bond, this could be because the insurers haven't actioned/accepted the registered letter.  They will need to do this, before it appears. Call them and request it, then you will be able to reinstate.
• The action icons (like Change Policy) are not available while the policy is pending cancellation.  If a change needs to be made before the cancellation date it would need to be reinstated, payments collected and then you will be able to proceed to change the policy. 
• The policy cannot be reinstated AFTER its been cancelled. It is only eligible if the status is Pending Cancellation.
• Reinstatement varies by market – Agile Sprint, Wawanesa and SGI are automated within the system once the underwriter reinstates on their end. But for MyMutual the user must select/confirm when the MyMutual underwriter agrees to the Reinstatement. 
• For details on how to Reinstate, please refer to article 'Reinstatement Process'. 

 

 

Basically, the enhancement is to allow registered letters into the renewal term (if released) HOWEVER if it needs to be reinstated the user will need to wait until renewal to reinstate.  The issue here is if the pending cancellation date is the same date or near the date of renewal as it will give little time for the user to request the reinstatement.. especially if it falls on the weekend.  See this article for more information: Registered letters and Renewals.

 

 

 

If a policy is pending renewal and the registered letter is sent and will cancel before the renewal date, the current policy is effectively cancelled and the renewal policy is also cancelled, without having to cancel that policy term too.

 

For example, if the policy is due for renewal on December 31st 2021, and a registered letter is sent with a cancellation date of December 20th 2021, once cancelled the current policy term will send on December 20th AND the renewal that was due to start on the December 31st 2021 until December 31st 2022, will also cancel.

 

If the current policy is pending registered letter cancellation and the policy is reinstated then the renewal policy is NEVER cancelled and will continue in the renewal policy term too.

 

 

When you are trying to process a change you may see this error pop up:

 

 

This is a warning that the policy is in the state of Pending Cancellation and therefore no changes can be processed.

 

An example of when you might see this is if you are trying to edit the Customer address in the Customer Profile screen, using the edit pencil, shown here: 

 

 

This edit feature allows you to change the policy, but without using the Change Policy icon.  However you should not be able to perform any changes to the policy whilst it is in a Pending Cancellation state, either by registered letter or customer requested cancellation. This is why you will receive this messaging. 

 

Also, bear in mind, that once the policy is reinstated, if payments were previously collected monthly, they will no longer be collected that way. The reinstate feature changes to Annual pay.  Therefore any refund or additional premiums will need to be collected in one go too.