Under a Commercial Auto Insurance Plan (CAIP), which entity may cancel during the policy period due to nonpayment?

Under a Commercial Auto Insurance Plan (CAIP), which entity may cancel during the policy period due to nonpayment?

• A. The insured's agent
• B. The servicing carrier
• C. The insurer's home office
• D. The underwriter

Answer: (B)

In a Commercial Auto Insurance Plan, the servicing carrier is the party that handles policy administration, including premium billing and cancellations. Because nonpayment directly involves the policy’s premium, the servicing carrier has the authority to cancel the policy during the policy period, subject to required notice. The insured’s agent, the insurer’s home office, and the underwriter don’t perform mid-term cancellations for nonpayment in this arrangement; their roles are related to sales, centralized administration, and underwriting, not day-to-day cancellation actions.

In a Commercial Auto Insurance Plan, the servicing carrier is the party that handles policy administration, including premium billing and cancellations. Because nonpayment directly involves the policy’s premium, the servicing carrier has the authority to cancel the policy during the policy period, subject to required notice. The insured’s agent, the insurer’s home office, and the underwriter don’t perform mid-term cancellations for nonpayment in this arrangement; their roles are related to sales, centralized administration, and underwriting, not day-to-day cancellation actions.