Reinsurance Premium Paid to Treaty Reinsurer
Remitting the quarterly reinsurance premium to the treaty reinsurer.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Reinsurance Payable | Liability (-) | 60,000.00 | - |
| Cash / Bank | Asset (-) | - | 60,000.00 |
💡 Accountant's Note
This clears the reinsurance payable created when the ceded premium was accrued. Quarterly payments are standard for proportional treaties.
Practitioner & Systems Framework
💻 ERP Architecture
Reinsurance premium remittances are processed through the AP module with the reinsurance payable as the offsetting account. The payment is typically made via SWIFT international bank transfer to the reinsurer or via the reinsurance broker's settlement account. Many treaties require payment within 30-45 days of the account period end. In SAP, the reinsurance payable sub-ledger (by treaty and reinsurer) must be reconciled to the GL control account before payment runs.
⚠️ Audit Flags
Auditors confirm that reinsurance payable balances are settled promptly — long-outstanding payables may indicate cash flow difficulties or disputed treaty terms. Verify that payments are made to the correct reinsurer bank account as per the treaty or broker instruction (a fraud risk area). Reconcile the total reinsurance payments made during the year to the ceded premium expense to identify any timing differences or unexplained variances.
📄 Required Documentation
Quarterly account statement from the reinsurer or broker, payment instruction with dual authorisation, treaty payment terms confirmation, bank transfer confirmation, and reconciliation of reinsurance payable sub-ledger to GL.
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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.