Please check $ARCOT_HOME/logs/adaptorshim.log file on the policy server. This log file might give you information about the issue.
Most common scenario for this kind of error is when your $ARCOT_HOME/conf/adaptorshim.ini file has
Configured AFM Landing URL and Auth Url in the token.
------------------ Reference entry in for this error in adaptorshim.log file -------------------
Configured AFM Landing URL https://abc.com:443/arcotafm/master.jsp?profile=testprofile1 does not match auth url in token: https://xyz.com:443/arcotafm/master.jsp?profile=testprofile1
Possible solution:
check SM policy server is returning same name or ip for the Web server that is hosting "arcotafm.war" web application.
also, check you haven't provided etc/host file for web server entry differently than expected.