Cancellation Qualifying Reasons/RC 22

Reason Code 22: Cancel and Rewrite Due to Administrative Error

This reason code applies when a policy must be canceled and rewritten to correct an administrative error, such as an incorrect policy effective date, rating error, or misapplied coverage. The rewritten policy ensures continuous and accurate coverage.

Condition	Details
Eligibility for Cancellation	A policy may be canceled and rewritten if an administrative error affected the policy’s accuracy, including incorrect effective dates, rating issues, or misapplied coverage.
Effective Date of Cancellation	The effective date of the policy term when the administrative error occurred.
Policy Terms Eligible for Refund	The term in which the administrative error occurred and any subsequent terms requiring correction.
Type of Refund	A full refund, including surcharges and fees, is applied to the canceled policy. The refund is then applied to the rewritten policy.
Required Documentation	Documentation verifying the administrative error, such as system records, underwriting memos, or rating sheets.

This table can be seen on page 6-13 of the FIM.

Additional Guidance

• The rewritten policy must maintain continuous coverage without a lapse.
• Common administrative errors include:
  • Incorrect policy effective date.
  • System constraints preventing proper coverage application.
  • Incorrect rating factors applied to the original policy.
• If a claim has been paid on the original policy, corrections should be made through an endorsement instead of cancellation and rewrite.

Required Documents

To process this cancellation reason, underwriters must verify the documentation provided.

• System records or underwriting memos showing the error.
• Supporting documents confirming the correction.

Document Gallery

• System Record: Screenshot or report showing the administrative error.
• Underwriting Memo: Explanation of the required policy correction.

Scenarios for Context

Scenario 1:
An NFIP policy is issued with an incorrect effective date due to a system processing error. The insurer identifies the issue and cancels and rewrites the policy to reflect the correct date, ensuring no lapse in coverage.

Scenario 2:
A policyholder’s premium was miscalculated due to an incorrect rating factor. The underwriter cancels and rewrites the policy with the correct rating, applying the refund to the new policy.

This page contains details about NFIP Cancellations. Find more in the How To Cancel section of the NFIP Flood Insurance Manual.