Can a Carrier Reject a Client-Signed LPR?
Question from an agent: “We recently had an issue with a carrier not accepting a signed lost policy release (LPR) cancellation request we sent them. My customer service representative (CSR) called them and they said they do not accept LPRs from other agents, and that the insured must call and cancel the policy themselves over the phone. We tried to circumvent the agent and cancel direct through the replacing carrier, but their response was that they only accept an LPR from one of their agents. As if things in this business aren’t frustrating enough, I hope this is not a trend that starts gaining traction with other agents. Just more work on our part. Can an agency or a carrier refuse to accept a client signed ACORD LPR?”
Answer: No, probably not.
You didn’t say what type of policy is involved here. However, Connecticut Insurance Law is silent about what an insured must do to cancel a policy. In other words, nothing in state law requires an insured to use an LPR or any other particular document to request cancellation. Since the law does not address it, the terms of the insurance policy (the contract) govern. Here are some examples of the wording from various insurance policies:
Progressive Connecticut Auto Policy 9611A CT 0614
“You may cancel this policy during the policy period by calling or writing us and stating the future date you wish the cancellation to be effective.”
Travelers Agreement, Definitions, and Policy Conditions – Homeowners HQ-D77 CW (05-17)
“A named ‘insured’ shown in the Declarations may cancel this policy by:
(1) Returning this policy to us; or
(2) Giving us advance written notice of the date cancellation is to take effect.
We may accept another form of notice from a named ‘insured’. The cancellation by a named ‘insured’ will be binding on any other named ‘insured’.”
The Hartford Spectrum Businessowners Policy Form SC 01 06 10 18
“The Named Insured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation.”
ISO Commercial Lines – Connecticut Changes – Cancellation and Nonrenewal IL 02 60 01 19
“The first Named Insured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation.”
Most of these simply require the named insured to give the insurer advance notice in writing of cancellation. Progressive will accept a phone call. Travelers is flexible as to the form of notice. None of them require an LPR.
Therefore, the only requirements are:
- The notice must come from the named insured
- It must give advance notice of the effective date
Unless the policy you referred to says something different, any other requirements are something somebody made up. The insurer (and by extension its agent) are bound by the terms of the contract they wrote.
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