Cancellation Qualifying Reasons/RC 07 - Revision history

WikiAdmin: /* Reason Code 07: Property Closing Did Not Occur */

2025-03-26T15:30:19Z

Reason Code 07: Property Closing Did Not Occur

← Older revision		Revision as of 08:30, 26 March 2025
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	\|A signed cancellation request or a signed statement from the policyholder confirming that the closing did not occur.		\|A signed cancellation request or a signed statement from the policyholder confirming that the closing did not occur.
	\|}		\|}
	''This table can be seen on page 6-4 of the {{FIM\|166}}.''		''This table can be seen on page 6-4 of the {{FIM\|page=166}}.''

	==== Additional Guidance ====		==== Additional Guidance ====

WikiAdmin at 14:43, 13 February 2025

2025-02-13T14:43:23Z

← Older revision		Revision as of 07:43, 13 February 2025
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	'''Scenario 2:''' <br>		'''Scenario 2:''' <br>
	A lender requires flood insurance before closing a mortgage loan. However, the loan application is denied, and the closing never happens. The policyholder requests cancellation, and the insurer nullifies the policy from inception.		A lender requires flood insurance before closing a mortgage loan. However, the loan application is denied, and the closing never happens. The policyholder requests cancellation, and the insurer nullifies the policy from inception.


	{{line-nfip-cxl}}		{{line-nfip-cxl}}

WikiAdmin: /* Required Documents */

2025-02-13T14:42:53Z

Required Documents

← Older revision		Revision as of 07:42, 13 February 2025
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	* Signed cancellation request from the policyholder.		* Signed cancellation request from the policyholder.
	* Signed statement from the policyholder confirming the closing did not occur.		* Signed statement from the policyholder confirming the closing did not occur, usually via the '''[[Cancellation Verification Letter]]'''.

	~~=== Document Gallery ===~~
	* '''Signed Policyholder Statement:''' Confirmation that the ~~property closing did not occur.~~
	* '''Cancellation ~~Request Form:~~''' ~~Signed request for policy nullification~~.

	== Scenarios for Context ==		== Scenarios for Context ==

WikiAdmin: Created page with "=== Reason Code 07: Property Closing Did Not Occur === This reason code applies when an NFIP policy was issued in anticipation of a property transfer, but the closing did not take place. Since the policyholder never had an insurable interest, the policy must be nullified from inception. {| class="wikitable" !'''Condition''' !'''Details''' |- |'''Eligibility for Cancellation''' |A policy may be nullified if the property closing did not occur and the policyholder never h..."

2025-02-12T18:49:05Z

Created page with "=== Reason Code 07: Property Closing Did Not Occur === This reason code applies when an NFIP policy was issued in anticipation of a property transfer, but the closing did not take place. Since the policyholder never had an insurable interest, the policy must be nullified from inception. {| class="wikitable" !'''Condition''' !'''Details''' |- |'''Eligibility for Cancellation''' |A policy may be nullified if the property closing did not occur and the policyholder never h..."

New page

=== Reason Code 07: Property Closing Did Not Occur ===

This reason code applies when an NFIP policy was issued in anticipation of a property transfer, but the closing did not take place. Since the policyholder never had an insurable interest, the policy must be nullified from inception.

{| class="wikitable"
!'''Condition'''
!'''Details'''
|-
|'''Eligibility for Cancellation'''
|A policy may be nullified if the property closing did not occur and the policyholder never had an insurable interest.
|-
|'''Effective Date of Cancellation'''
|The policy is nullified from the beginning of the policy term.
|-
|'''Policy Terms Eligible for Refund'''
|Current policy term only.
|-
|'''Type of Refund'''
|A full refund, including surcharges and fees, unless a claim was paid during the policy term.
|-
|'''Required Documentation'''
|A signed cancellation request or a signed statement from the policyholder confirming that the closing did not occur.
|}
''This table can be seen on page 6-4 of the {{FIM|166}}.''

==== Additional Guidance ====
* Since the closing did not occur, the policyholder never had an insurable interest, meaning the policy must be nullified rather than canceled mid-term.
* If a claim has already been paid, the policyholder must return the claim payment before the policy can be nullified.
* This cancellation reason is most commonly used in real estate transactions where insurance was required for an anticipated closing that was later canceled.

== Required Documents ==
To process this cancellation reason, underwriters must verify documentation confirming that the property closing did not take place.

* Signed cancellation request from the policyholder.
* Signed statement from the policyholder confirming the closing did not occur.

=== Document Gallery ===
* '''Signed Policyholder Statement:''' Confirmation that the property closing did not occur.
* '''Cancellation Request Form:''' Signed request for policy nullification.

== Scenarios for Context ==

'''Scenario 1:''' <br>
A homebuyer purchases an NFIP policy in anticipation of closing on a house, but the transaction falls through. The buyer submits a signed statement confirming the failed closing, and the policy is nullified from inception with a full refund.

'''Scenario 2:''' <br>
A lender requires flood insurance before closing a mortgage loan. However, the loan application is denied, and the closing never happens. The policyholder requests cancellation, and the insurer nullifies the policy from inception.

{{line-nfip-cxl}}