Minimum Earned Premium Cancellation Formula Calculator
Budget actual cancellation return under explicit greater-of-pro-rata/minimum-earned premium and independent nonrefundable fee; not short-rate table or legal refund guarantee.
Description
Minimum-earned cancellation retains the greater of elapsed-time premium and a caller floor.
Minimum-earned cancellation retains the greater of elapsed-time premium and a caller floor. Nonrefundable fees reduce the remaining refund.1
The returned values include Caller pro rata earned minor, Caller minimum earned minor, Caller modeled return premium minor. The How section below explains the calculation, input rules and interpretation.
When to use Minimum Earned Premium Cancellation Formula Calculator
Use Minimum Earned Premium Cancellation Formula Calculator when you need to evaluate the supplied records under the calculation and evidence rules below. No short-rate table, policy entitlement or legal refund guarantee is supplied.
Prepare the observed policy, claim or quote evidence and independently verified policy tables. Monetary fields use integer minor units in one currency: for a currency with 100 minor units per major unit, enter 12345 for 123.45. One basis point is 0.01 percentage points, so 10000 basis points represents 100%.
How to use Minimum Earned Premium Cancellation Formula Calculator and understand its results
- Prepare the observed policy, claim or quote evidence and independently verified policy tables. Monetary fields use integer minor units in one currency: for a currency with 100 minor units per major unit, enter 12345 for 123.45. One basis point is 0.01 percentage points, so 10000 basis points represents 100%.
- Enter callerWrittenPremiumMinor, callerObservedElapsedTermDays, callerTotalTermDays, callerMinimumEarnedBasisPoints, callerNonrefundableFeeMinor using the field table and calculation rules, then run the tool.
- Read callerProRataEarnedMinor, callerMinimumEarnedMinor, callerModeledReturnPremiumMinor. The explanation below defines the units, signs, ordering and any flags or placeholder values.
- If the tool reports an input issue, correct the values and run it again. Apply the stated assumptions when interpreting a successfully returned result.
| Input field | Meaning | Value type; see rules below | Requirement |
|---|---|---|---|
| callerWrittenPremiumMinor | Caller written premium minor | number | Required |
| callerObservedElapsedTermDays | Caller observed elapsed term days | number | Required |
| callerTotalTermDays | Caller total term days | number | Required |
| callerMinimumEarnedBasisPoints | Caller minimum earned basis points | number | Required |
| callerNonrefundableFeeMinor | Caller nonrefundable fee minor | number | Required |
Enter integer written/fee money 0–10¹², integer term days 1–3660, elapsed days 0–term and minimum basis points 0–10000. Return both earned scenarios and zero-clipped modeled return.
proRata=roundMinor(written×elapsed/term); minimum=roundMinor(written×minimumBps/10000); return=max(0,written−max(proRata,minimum)−fee) Units, indexing, boundary conditions and exceptional cases are defined in the calculation rules above.
| Output field | Meaning | Value type |
|---|---|---|
| callerProRataEarnedMinor | Caller pro rata earned minor | number |
| callerMinimumEarnedMinor | Caller minimum earned minor | number |
| callerModeledReturnPremiumMinor | Caller modeled return premium minor | number |
{
"input": {
"callerWrittenPremiumMinor": 10000,
"callerObservedElapsedTermDays": 20,
"callerTotalTermDays": 100,
"callerMinimumEarnedBasisPoints": 3000,
"callerNonrefundableFeeMinor": 100
},
"output": {
"callerProRataEarnedMinor": 2000,
"callerMinimumEarnedMinor": 3000,
"callerModeledReturnPremiumMinor": 6900
}
}Limitations and assumptions
No short-rate table, policy entitlement or legal refund guarantee is supplied.
Numeric inputs, where present, must be finite. Follow the calculation-specific rules for overflow, underflow and exceptional cases. Missing required fields, extra fields, wrong value types and violations of the calculation rules are input errors.
Alternative or Complementary methods
Use Short Rate Cancellation Penalty Table Lookup: Short-rate cancellation uses a verified earned-premium schedule rather than straight elapsed-time proration. An independent fee reduces the return. For a complementary task, use Mid Term Endorsement Proration Return Premium Calculator: A mid-term endorsement prorates the difference between full-term premiums over remaining civil days. A half-open term excludes its end date.
References
Similar or alternative tools
- Short Rate Cancellation Penalty Table Lookup
Short-rate cancellation uses a verified earned-premium schedule rather than straight elapsed-time proration. An independent fee reduces the return.
- Mid Term Endorsement Proration Return Premium Calculator
A mid-term endorsement prorates the difference between full-term premiums over remaining civil days. A half-open term excludes its end date.