Cancellation is the termination of an insurance policy or bond before it expires, either by the policyholder or the insurer. Policy cancellation provisions require insurers to notify policyholders in advance (usually 30 days) of policy cancellation and stipulate the manner in which any unearned premium will be refunded. With respect to reinsurance, cancellation is used in the following contexts: (1) Reinsurance ground means that the reinsurer’s liability for policies that came into effect under a contract prior to the date of cancellation of such contract continues until the expiration date of each policy. (2) The cut-off basis means that the reinsurer’s liability for policies effective under the contract prior to the date of cancellation of such contract ceases in respect of losses resulting from accidents occurring on or after that date of cancellation. Typically, the reinsurer returns the unearned premium portfolio to the company if the contract is not based on earned premiums.