Warranty not creating when order is shipped

We have a fresh R12.2.2 vision instance.  All setups look good but warranty contract is not getting created when order is shipped. 

1) Serviceable Item is created

2) Warranty Item is created for a newly created coverage template

3) BOM item and BOM is created for 1) & 2)

4) Order is created to ship BOM item

5) Order Shipped

6) Item instance is created in IB but no warranty contract is created in contracts.

Does anyone have any input?

Thanks