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?"
You didn’t say what type of policy is involved here. However, New York 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:
“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." – Progressive New York Auto Policy 9611A NY 0922
“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’." — Travelers Agreement, Definitions, and Policy Conditions – Homeowners HQ-D77 NY (05-17)
“The first Named Insured shown in the Declarations may cancel this entire policy by mailing or delivering to us advance written notice of cancellation." — The Hartford Spectrum Businessowners Policy Form SS 01 26 07 18
“The first Named Insured shown in the Declarations may cancel this entire policy by mailing or delivering to us advance written notice of cancellation." – ISO Commercial Lines – New York Changes – Cancellation and Nonrenewal IL 02 68 01 14
“You may cancel the entire Policy by returning it to us or by giving us advance notice of the date cancellation is to take effect." – ISO Commercial Auto – New York Changes – Cancellation CA 02 25 06 20
“You may cancel this policy at any time by giving us written notice or returning the policy to us and stating when thereafter the Cancellation is to be effective." – URB Cancellation and Renewal Provisions (Commercial Lines Insurance) COMM CANC Ed. 7/86
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. The ISO Commercial Auto endorsement doesn’t specify written notice at all. None of them require an LPR. In my new CE course “I Think We Should Break Up: Policy Cancellation, Non-Renewal and Conditional Renewal Rules," I tell the attendees that the insured could send the insurer a greeting card that says “cancel my policy effective tomorrow" and that would comply with the policy terms and conditions.
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 the other agent 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.