by PariahInMotion » Sat Jan 17, 2009 04:22 am
What does this mean?
When an insurer makes changes to a policy that result in unearned premium, he or she must refund that premium to the insured according to the following schedule:
1) 25 days - for unearned premium created when an insurer endorses, rejects, declines, cancels or surrenders a policy.
2) 15 days - if the unearned premium is sent to the agent of record. The agent must pay interest if the premium is kept after 15 days, unless the insurer is in liquidation or under a conservator.
3) 120 days - after policy coverage ends due to cancellation.
When an insurer makes changes to a policy that result in unearned premium, he or she must refund that premium to the insured according to the following schedule:
1) 25 days - for unearned premium created when an insurer endorses, rejects, declines, cancels or surrenders a policy.
2) 15 days - if the unearned premium is sent to the agent of record. The agent must pay interest if the premium is kept after 15 days, unless the insurer is in liquidation or under a conservator.
3) 120 days - after policy coverage ends due to cancellation.
Posted: Sat Jan 17, 2009 05:20 am Post Subject:
Hi..
This is certainly an interesting piece of information. See..we need to be clear of one thing first- an insured would generally pay the premiums a quarter in advance of the coverage period. Now, this premium is still not earned by your carrier till the policy expires (ie. till the coverage period lasts). So, under those circumstances if you'd need to file a claim that brings the coverage objective to an end then there's no further requirement for you to continue with the coverage.
In other words say your car suffers a total loss before the coverage period has expired then there's no need for you to pay for the remaining coverage period. But since you've already paid for the coverage period in advance, hence its your right to get back the advance premium paid. It would also be the carrier's responsibility to pay you back for their unearned premium. Hope you got my point!
ArindamSenIndies
Posted: Sat Jan 17, 2009 09:36 am Post Subject:
I think the unearned premium has to reach the policy holder within 25 days once his carrier decides not to continue offering the same benefits as mentioned in the policy clauses. In case the premium payment procedure involves an agent, then the reimbursement should also involve this agent. In that case the agent has to show this amount to his client (the policyholder) within 15 days from the date when the policy changes, failing which he'd need to bear the penalty i.e. the interest.
Posted: Sat Jan 17, 2009 11:11 am Post Subject:
Hi PariahInMotion
An unearned premium means that portion of money that has already been paid by the insured in advance for an insurance that has not been received by him yet.
1) 25 days - for unearned premium created when an insurer endorses, rejects, declines, cancels or surrenders a policy.
by this I think this means that the insurer is supposed to repay the unearned premium created, within 25 days from the time the policy gets endorsed, rejected, canceled or surrendered.
Similarly
2) 15 days - if the unearned premium is sent to the agent of record. The agent must pay interest if the premium is kept after 15 days, unless the insurer is in liquidation or under a conservator.
The agent has a period of 15 days within which he must repay the insured and if he does not then he will have to pay an additional amount as interest on the unearned premium payable.
3) 120 days - after policy coverage ends due to cancellation.
In case a policy is canceled before it is due and the insured has paid an advanced premium, the extra amount which is the unearned premium needs to be paid back to him by the insured within 120 days.
Hope I could help :)
Add your comment