How to record captive dividend distributions
Journal entry for an MGA or broker-owned captive to record the distribution of underwriting profits to its shareholders.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Retained Earnings - Captive Cell | Equity | 25,000.00 | - |
| Dividends Payable | Liability | - | 25,000.00 |
💡 Accountant's Note
This entry records the board-approved distribution of surplus profits from a captive insurance entity, reducing equity and creating a liability until paid.
Practitioner & Systems Framework
💻 ERP Architecture
Equity account adjustments usually managed in a separate captive management ledger or via manual journal.
⚠️ Audit Flags
Distributions that cause the captive's capital to fall below the statutory minimum solvency ratio.
📄 Required Documentation
Board resolution, solvency certificate, and regulatory approval from the captive's domicile manager.
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Discussion & Community Questions
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