Claire-ification

Are you a member with a question? Contact IA&B Vice President - Advocacy Claire Pantaloni, CIC, CISR to find the answer at 717-918-9202 or ClaireP@IABforME.com.

QUESTION:

When cancelling a policy currently with another agent, who should sign and send the ACORD 35 to the carrier?

ANSWER:

The issue of how to complete, sign, and process the ACORD 35 comes up every so often. For various reasons, which we won’t delve into, some agencies are reluctant to process an ACORD 35 cancellation request received from another agency, and we have heard of cases where the signed form was sent directly to the trash. This led to duplicate insurance and headaches down the road trying to address a retroactive cancellation and the return of premiums.

So what is the proper way to handle the ACORD 35 to ensure both a smooth transition and a compliant process? Can the new producer sign it rather than the incumbent? How can you avoid issues?

The basics: The ACORD 35 was designed, in part, to cancel a policy. While the legal right to cancel an insurance policy rests with the insured as outlined in the policy documents, the ACORD 35 form serves to facilitate a clear and documented cancellation process.

Which producer can sign it? Both old and new agents are authorized to complete the ACORD 35. Yes, the new agent is more likely to send the notice as opposed to the old agent. But it is important to know that as a general practice, the countersignature of the old agent is not required.

What’s the best practice to avoid issues? The new agent can ensure a smooth transition by:

▲ Submitting the Cancellation Request: By formally and directly submitting the ACORD 35 to the insurer, the new agent guarantees that the cancellation will be initiated with the previous carrier.

▲ Preventing Duplicate Coverage: Timely cancellation avoids the potential for overlapping coverage periods and unnecessary premiums.

▲ Simplifying Communication: Sending a copy of the form to the incumbent agent keeps them informed and avoids confusion.

Bottom line: Having the new agent complete the form and send it to the insurer and the old agent on behalf of the policyholder is now considered the best practice.

This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice. Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Insurance Agents & Brokers nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.