How to record reinsurance claims payable
Recording the liability for claim settlements owed to insureds on behalf of a reinsurance carrier.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Reinsurance Recoverables | Asset | 5,000.00 | - |
| Claims Payable to Insureds | Liability | - | 5,000.00 |
💡 Accountant's Note
When an MGA or broker acts as a settlement agent, they recognize a receivable from the reinsurer and a corresponding liability to the claimant.
Practitioner & Systems Framework
💻 ERP Architecture
Must be reconciled against the claims bordereau report.
⚠️ Audit Flags
Large balances in claims payable without corresponding cash movements.
📄 Required Documentation
Adjuster's loss report and carrier settlement authorization.
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