Tuition Insurance Premium (Agency)
Collecting optional tuition insurance fees from parents to be remitted to a 3rd party insurer.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash | Asset (+) | 100.00 | - |
| Due to Insurance Provider | Liability (+) | - | 100.00 |
💡 Accountant's Note
The school offers insurance to parents. The school is not the insurer; it is an agent. The liability is cleared when the premiums are sent to the insurance company.
Practitioner & Systems Framework
💻 ERP Architecture
Tuition insurance premiums are collected via the SIS billing system as an optional fee at enrolment. The collected amounts are held in an insurance payable liability account and remitted to the third-party insurer (e.g., GradGuard, A.W.G. Dewar) per the agreed remittance schedule (typically monthly or per semester). The institution records no revenue on the pass-through. If the institution receives a commission or administration fee from the insurer, that fee is recognised as revenue. The insurance provider maintains the policy records and handles claims directly with parents.
⚠️ Audit Flags
Auditors confirm the agent classification and that no revenue is recorded on the gross premium collected. Verify that the liability balance at year-end matches the amount owed to the insurer for premiums collected but not yet remitted. Test that opt-in records are maintained for each paying family — the institution should only collect from families who have elected coverage. Confirm that any commission received from the insurer is properly recorded as revenue and disclosed.
📄 Required Documentation
Tuition insurance provider agreement (confirming agent role and commission terms), parent opt-in confirmation, premium collection report by student, remittance to insurer with schedule of covered students, liability reconciliation, and commission income records (if applicable).
Automate this entry with the JEH Accounting Suite
Stop doing manual entry. Our VBA-powered ERP automatically generates your ledgers, Trial Balance, and Financial Statements.
No Subscriptions. Own your data.
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.