Provisional Notice of Cancellation (PNOC)

A provisional notice of cancellation, or PNOC, is the mechanism for the parties to a reinsurance agreement to notify their counterparty they no longer wish to continue with the agreement. A PNOC is used with a continuous contract that, once entered into, does not have an end date.

Insurance contracts are typically active for a duration of one year. During this active period, the insurer will provide coverage for the hazards outlined in the policy agreement. Some insurance contracts, such as one year renewable term life insurance, contain provisions that allow the policy to renew automatically as long as the insured agrees to continue to pay the annual premiums. This type of policy is referred to as a continuous contract.

The policy documentation will outline not only the date the policy became effective and the renewal date, but it may also state the policy will remain in-effect until one party provides a provisional notice of cancellation. For example, the policy may state either party may withdraw from the agreement by providing the other party with 60 days' notice.

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