How to book excess of loss premium
Recording the premium payable for excess of loss reinsurance coverage purchased by the MGA for its portfolio.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Reinsurance Premium Ceded Expense | Debit | 12,000.00 | - |
| Reinsurance Payable | Credit | - | 12,000.00 |
💡 Accountant's Note
Excess of Loss (XOL) premiums are costs incurred by the MGA to mitigate risk exposure. This entry recognizes the expense and the obligation to the reinsurer.
Practitioner & Systems Framework
💻 ERP Architecture
Map the XOL expense to the specific line of business or binder to track net underwriting margin.
⚠️ Audit Flags
Failure to accrue XOL premiums proportional to the underlying gross written premium (GWP).
📄 Required Documentation
XOL reinsurance contract and premium bordereau.
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Discussion & Community Questions
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