How to record claim subrogation proceeds
Accounting for funds recovered from third parties via subrogation, which are held in trust before being remitted back to the carrier.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Fiduciary Trust Cash | Asset | 2,500.00 | - |
| Due to Carrier - Subrogation | Liability | - | 2,500.00 |
💡 Accountant's Note
Subrogation recoveries are not revenue for the broker; they represent funds belonging to the carrier or the loss fund. The broker acts as a conduit.
Practitioner & Systems Framework
💻 ERP Architecture
Use a specific 'Subrogation' transaction type to distinguish from premium receipts.
⚠️ Audit Flags
Retention of subrogation funds in the trust account for longer than the contractually allowed period.
📄 Required Documentation
Legal settlement documents, check from third-party insurer, and subrogation recovery notice.
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Discussion & Community Questions
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