Co-Insurance — Premium Split Between Insurers
Recording the lead insurer's share of a co-insurance arrangement on a large property risk.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Premium Receivable (Lead Insurer Share 60%) | Asset (+) | 36,000.00 | - |
| Payable to Co-Insurer (40% Share) | Liability (+) | - | 24,000.00 |
| Written Premium (Lead Share) | Revenue (+) | - | 60,000.00 |
💡 Accountant's Note
The lead insurer collects the full premium and remits the co-insurer's share. Each insurer only recognizes their own proportional share as revenue and bears only their share of claims.
Practitioner & Systems Framework
💻 ERP Architecture
The lead insurer's policy admin system records the full gross premium collected, with the co-insurer share recorded as a payable (not ceded reinsurance — co-insurance is a direct market arrangement). The co-insurer's share is remitted after collection, typically within 30-60 days per the co-insurance agreement. Each co-insurer independently sets up their share of UPR. The lead must maintain a co-insurer payable sub-ledger by company.
⚠️ Audit Flags
Auditors confirm that each co-insurer recognizes only their own proportional share of premium, UPR, and claims — there should be no double-counting. The lead insurer's payable to co-insurers should be reconciled and promptly settled. Late remittance to co-insurers is a regulatory concern. Also verify that the co-insurance agreement is documented with written confirmation of each party's share.
📄 Required Documentation
Co-insurance slip or agreement specifying each party's percentage share, premium collection confirmation, remittance schedule to co-insurers, and each party's signed 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.