During invoice schedule generation, endorsements, cancellations, and unearned premium calculations, Socotra allocates premium to each coverage period using a single method, so all calculations are consistent.
If periods start and end at 00:00:00 (midnight), actual-millisecond proration is the same as actual-day
When allocating premium to billing periods, Socotra assigns the same amount to each whole billing period and then uses actual-millisecond proration for partial billing periods.
Consider the following scenario where a cancellation is processed before the end of the policy term:
The policy period is from June 13th for a one year term
The total premium for the year is $1200
The policyholder requests a cancellation effective September 19th
The remaining coverage period is from June 13th until September 19th, which is 3 months and 6 days.
Since September 13th to October 13th is 30 days, the coverage period is 3 + 6/30 = 3.2 months long.
Therefore, Socotra will allocate $1200 / 12 * 3.2 = $320 to the coverage period
Socotra will invoice $100 per month, until the invoice due September 13th, which will be for the $20 remainder