Why Your Agency May Have Received Return Premium

There are a couple of reasons why your agency may have received return premium for a canceled policy:

1. The policy was paid in full

2. The carrier returns all RP to the agency for Agency Bill policies (regardless of a Premium Finance Company's involvement)

3. The carrier did not have the policy marked as Financed in their system for various reasons (they did not process Ascend's Notice of Finance at the start of the policy)

Ultimately, Ascend does not have power over or insight into the carrier's process for cancellations, so we have processes to collect back funds for canceled policies regardless of where those funds are issued.

Why Your Agency Must Return Unearned Premium and Unearned Commission

Your agency is legally obligated to remit any return premium received to the finance company to close out the insured’s loan. Failure to do so may constitute misappropriation of funds and can expose your agency to legal and regulatory liability:

1. Fiduciary duty under state insurance law: In most U.S. states, insurance agents and brokers are considered fiduciaries with respect to client and carrier funds. That means they must handle premiums, return premiums, and unearned commissions in accordance with the contracts and applicable law. Holding or failing to remit those funds is a breach of fiduciary duty.

1. Return premiums belong to the finance company, not the agent: When a policy is financed, the premium finance agreement assigns the right to any return (unearned) premium to the finance company. The agency has no ownership interest in those funds. Keeping them or delaying remittance can be treated as conversion or misappropriation.

2. Regulatory exposure: State Departments of Insurance (DOIs) can take disciplinary action — including fines, license suspension, or revocation — for failure to promptly remit return premium owed to a finance company.

3. Civil liability: The finance company can also pursue the agency for damages (interest, fees, legal costs) if the agency’s failure to forward funds causes loss or delay in closing the loan.

There’s no universal statute requiring the return of unearned commission. The agency agreement or premium finance agreement, however, typically imposes a contractual duty to refund or credit the unearned portion of the commission. For both contractual and statutory reasons, we encourage you to remit unearned premium and commission to the finance company quickly to avoid regulatory exposure and complaints to the insurance board. Until the finance company receives unearned funds on cancelled policies, your insured's loan could remain active and continue to accrue late fees and interest.

Step-by-Step Instructions:

How to return funds to Ascend when your agency receives RP

Here are the steps to return funds to Ascend for a cancelled program.

1. Cancel the program on Ascend dashboard if it has not been cancelled. See the article to view a walk-through of how to cancel a program.

2. Click on Actions > Return funds in the top right corner of the program page. If you do not see the Return funds option, the program may not yet be canceled.

3. Select the relevant policy that the return funds applies to from the pop-up window

4. In the Return funds dashboard, fill out the Net premium, Unearned commission, Taxes and fees based on the cancelation invoice.

5. Hit Create returns in the Return invoices and payments section

6. Choose Agency as payer and select both Net premium + fees and Unearned commission then hit Create transaction.

Finishing these steps will automatically create an invoice for your accounting team to remit the full premium back to Ascend.

What happens next?

• If the program is financed, Ascend will apply the received fund to the loan balance. If there is any overage, the insured will be issued a refund for that overage amount.

• If the program is paid in full, Ascend will issue the funds received directly back to your insured within 1 business day of receiving the return funds into our account.

Frequently Asked Questions

What if I returned the return premium to my insured directly and they have a financed program?

If your insured received a refund for the return premium and they still have an active loan balance, they will need to make a payment using an Ascend payment link for the amount of the loan balance payoff.

Please contact our Support Team at [email protected] for assistance with this process.

Can I refund my insured outside of Ascend?

• If the insured financed their program/policies, all return premium must be returned to Ascend to be applied to the insured's loan balance. We will issue a refund to the insured if there's any negative balance left when we close out the loan

• If the insured did not finance their program/policies, you can return the funds to the insured directly without using the Ascend platform to process the refund.

Contact Us

Need more help? Contact us at [email protected] for more help.