PREMIUM TRUST ASSETS

Premium trust assets include:

Current Assets:

  1. Cash in trust bank account;
  2. Cash on hand (premium checks received but not deposited in trust account);
  3. Premiums receivable (invoiced premiums);
  4. Return net premiums receivable (to be reimbursed by insurance company);
  5. Return commissions receivable (to be reimbursed from the operating account);
  • Non-Current Assets
  •      6. Net premium on unbilled premium
        
    7. Commission on unbilled premium
        
    8. Net premium on unbilled endorsements
        
    9. Commission on unbilled endorsements

    Items 1 through 5 are “current” premium assets. Cash and receivable assets represent the portion of the transacted premium that was either billed or paid by insured.

    Items 6 through 9 are “non-current” premium assets. They represent the outstanding balance of premium transacted that is yet to be billed or paid by insured.

    The sum of “current” and “non-current” premium assets represents the “total” premium trust assets.

    For any policy the “total amount” of premium assets decreases and becomes zero when all policy premium is received from insured and disbursed to the persons entitled thereto.

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    Copyright 2002 - 2005  - Paulmar Software, Inc. - All rights reserved - Last updated - Oct 18, 2005