Paulmar Software | Accounting | Trust Liabilities

PREMIUM TRUST LIABILITIES

Premium trust liabilities include:

Current Liabilities:

Net amount of statement premium (“net premium payable”);
Commission on premium receipts deposited in the trust bank account (“commission payable”);
Return premium reimbursed by insurance companies and not refunded to insureds (“return premium payable”);
Net amount of billed premium (“net premium current”);
Commission on billed premium (“commission current”);
Return premium insurance companies have not reimbursed (“return premium current”);

Non-Current Liabilities

   7. Net amount of unbilled transacted premium
   8. Commission on unbilled transacted premium
   9. Non-fiduciary funds (commission reserve and personal funds deposited in the trust bank
   account).

Items 1 through 6 represent “current” premium liabilities. They include both “payable” and “current” net premiums, commissions, and return premiums.

Items 7 and 8 represent “non-current” premium liabilities. They include net premiums and commissions on unbilled transacted premium.

The sum of “current” and “non-current” premium liabilities represent the “total” premium liabilities.

The sum of “total” premium liability and “non-fiduciary” funds (Item 9) represents the “total” trust account liability.