Provisional Notice of Cancellation (PNOC) 2025: Costs, Process & Key Insights

Julia Kagan is a financial and consumer journalist, formerly senior editor for personal finance at Investopedia.

What Is a Provisional Notice of Cancellation (PNOC)?

A Provisional Notice of Cancellation (PNOC) is a formal notification issued by one party within a reinsurance treaty signaling their intent to exit the agreement.

This notification applies exclusively to continuous reinsurance contracts—agreements that persist indefinitely until one party chooses to withdraw. Upon issuance of a PNOC, the involved parties generally have a 90-day window to renegotiate terms. Failing an agreement within this period results in contract termination.

Essential Highlights

• PNOC is a legally binding notice used in reinsurance to initiate contract renegotiation or cancellation.
• Typically, contracts permit one PNOC issuance per year, allowing 90 days for discussions.
• If renegotiations fail within the timeframe, the reinsurance contract is canceled.

How Does the PNOC Process Work?

Insurance companies manage complex risk portfolios by issuing numerous policies across multiple sectors. To manage exposure, insurers secure reinsurance treaties—long-term agreements where a reinsurer assumes liability for specific policy classes.

Through these treaties, insurers transfer portions of their risk in exchange for shared premiums. Continuous reinsurance contracts remain active until a party initiates termination via a PNOC.

Contracts usually include clauses permitting one PNOC per year, triggering a 90-day negotiation period before cancellation. Some agreements allow the issuing party to retract the PNOC anytime during negotiations, preserving the contract.

Practical PNOC Example

Michael operates an insurance firm specializing in condominium coverage. Facing increased claims related to dog liabilities, he procured reinsurance from a company experienced in canine risks.

After assessing Michael's portfolio, the reinsurer found the premiums insufficient for the assumed risk and issued a PNOC, requesting contract renegotiation for higher compensation. Both parties have the right to issue one PNOC annually and a 90-day negotiation window, with the option to withdraw the notice during this period.

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