How to record SIR cash collateral
Transfer of cash to a restricted account to satisfy carrier requirements for a self-insured retention program.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Restricted Cash - SIR Collateral | Debit | 50,000.00 | - |
| Operating Cash | Credit | - | 50,000.00 |
💡 Accountant's Note
Funds held by a carrier or in a trust to cover losses within the deductible or SIR layer are reclassified from operating to restricted cash.
Practitioner & Systems Framework
💻 ERP Architecture
Use a separate sub-account to prevent accidental inclusion in liquidity ratios.
⚠️ Audit Flags
Unreconciled balances between the bank statement and the carrier collateral report.
📄 Required Documentation
Collateral agreement and bank transfer confirmation.
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