When Serviceable Item is returned the Extended Warranty is not cancelled or refunded

 Hi,

I have set up an extended warranty for a serviceable item.  The extended warranty is created on the sales order when I associate the warranty with the servicable item.  The problem I have is when I return the servicable item the extended warranty is still in a signed status and no refund takes place.  I read somewhere that there is an OKS profile option that needs to be set for the refund but could not find that profile option.  I also could not find how the extended warranty contract gets terminated. 

Thanks