What must an insurer do when refunding excess and unearned premiums?

The correct answer involves the important procedural step of filing formulas, which refers to the requirement that insurers must document and report the calculations used to determine the amount of excess and unearned premiums that they are refunding to policyholders. This process ensures compliance with regulatory standards and provides transparency in the accounting practices of the insurer.

It is vital for insurers to maintain thorough records of how premiums are calculated and adjusted, particularly when it comes to refunds. This not only protects the insurer from potential disputes but also ensures that policyholders receive accurate and fair refunds based on the specific terms of their policy. By filing the necessary formulas, insurers uphold ethical and legal standards in their financial practices, thereby fostering trust with their clients.

Other options might suggest actions such as notifying the policyholder or adjusting premiums, but those tasks do not fulfill the necessary regulatory requirements tied specifically to the refunding process.