How to book retrospective rating adjustments
Adjusts the premium receivable or payable based on actual loss experience as determined by a retrospective rating formula.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Premiums Receivable | Debit | 1,500.00 | - |
| Ceded Premium Payable | Credit | - | 1,350.00 |
| Commission Income | Credit | - | 150.00 |
💡 Accountant's Note
In retrospective rating, the final premium is adjusted post-expiry. This entry records additional premium due from the client and the associated commission and carrier payables.
Practitioner & Systems Framework
💻 ERP Architecture
Use a 'Retrospective Adjustment' transaction type to link the entry to the original policy period.
⚠️ Audit Flags
Material changes in premium after policy expiration without supporting audit reports.
📄 Required Documentation
Retrospective rating calculation worksheet and carrier endorsement.
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.
Related Journal Entries
Insurance Broking & MGA
Insurance Commission — Recognized at Policy Inception/Renewal (Point-in-Time)
Insurance Broking & MGA
Contingent Commission / Profit Sharing — Variable Consideration Constrained Until Carrier Determination
Insurance Broking & MGA
Premium Trust Account — Client Premium Received (Not Broker Revenue — Fiduciary Obligation)
Discussion & Community Questions
Loading comments...