Premium accounting and solvency management is gradually implemented with new business and renewals. The deployment process is complete when all policies in-force are renewed. The deployment time varies from 9 months for installment premium policies to 13 months for audit premium policies. Little or no disruption to the agency’s ongoing business is expected during deployment.
Client-agencies will experience a period of transition from GL accounting to TL accounting. During the transition period two accounting systems will be at work managing premium funds. Current GL accounting will continue to manage premiums of policies in-force until policy terms expire. New TL accounting will manage new business and renewals.
Client-agencies will open a second trust bank account. The current trust bank account will continue to be used for bank deposits and disbursements of premiums managed under the GL system. The new trust bank account will be used for bank deposits and disbursements of premiums managed under the new TL system.
The premium activity in the current bank account will gradually decrease until its balance will be zero. A client-agency may abandon this bank account if it so desires.
During deployment, transacted premiums will be managed in parallel by the agency and IPM professional. Two remittance checks will be sent to insurance carriers for each statement; one remittance voucher will be prepared by the agency, the other by IPM professionals. Similarly, earned commissions will be transferred to the agency’s operating account from both current and new trust bank accounts.
Two Balance Sheets
During deployment client-agencies will have two balance sheets, one based on GL accounting records, the other based on TL accounting records. The first one is generated in its current format including both operating and premium trust funds. The second one will have the Paulmar format and include only premium funds.
Client-agencies will be enabled to combine the two balance sheets during deployment, if they so desire.
Complete solvency reports will be available for premium funds maintained under new TL accounting. Sample solvency reports are made available on this website