Premium Written — Broker Channel (Gross)
Recording a policy placed through an intermediary broker, with premium collected via the broker.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Broker Premium Receivable | Asset (+) | 8,000.00 | - |
| Written Premium — Broker Channel | Revenue (+) | - | 8,000.00 |
💡 Accountant's Note
Broker-channel business often involves a credit risk on the broker (not the insured). The insurer recognizes the full gross premium as a receivable from the broker, who in turn collects from clients.
Practitioner & Systems Framework
💻 ERP Architecture
Broker-channel premiums are recorded in the AR sub-ledger with the broker as the debtor (not the underlying insured). The broker is responsible for collecting from the client and remitting to the insurer within the agreed credit period (typically 30-60 days). The policy admin system identifies broker-sourced policies by the registered intermediary code. Premium credit control is managed at the broker level — if the broker fails, the insurer may face a loss even if the underlying insured has paid.
⚠️ Audit Flags
Auditors assess the credit risk on broker premium receivables — large balances from a single broker should be flagged. In Jordan, the IRC requires brokers to hold client funds in separate trust accounts — auditors may request confirmation that broker premium accounts are properly segregated. Test the age of broker receivables — amounts overdue beyond the credit period should be provided for or subject to policy cancellation. Review any cases where the insurer has paid a claim on a policy where the premium has not been received from the broker.
📄 Required Documentation
Broker credit terms in the brokerage agreement, broker premium receivable aging schedule, broker trust account confirmation (if required by IRC), credit limit for each broker, and documentation of any overdue balances and collection actions taken.
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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.