How to remit net premiums to carriers
Settlement of premiums due to an insurance carrier after the broker or MGA retains their earned commission.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Insurance Premiums Payable | Liability | 10,000.00 | - |
| Commission Income | Revenue | - | 1,000.00 |
| Fiduciary Cash Account | Asset | - | 9,000.00 |
💡 Accountant's Note
The liability is cleared by paying the insurer the net amount (gross premium minus commission).
Practitioner & Systems Framework
💻 ERP Architecture
Integrated accounts payable and broker ledger system for net settlement processing.
⚠️ Audit Flags
Aging of payables beyond the Credit Period (CP) specified in the Terms of Business Agreement (TOBA).
📄 Required Documentation
Bordereau statement, TOBA terms, and bank remittance advice.
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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.
Related Journal Entries
Insurance Broking & MGA
Insurance Commission — Recognized at Policy Inception/Renewal (Point-in-Time)
Insurance Broking & MGA
Contingent Commission / Profit Sharing — Variable Consideration Constrained Until Carrier Determination
Insurance Broking & MGA
Premium Trust Account — Client Premium Received (Not Broker Revenue — Fiduciary Obligation)
Discussion & Community Questions
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