Insurance Carrier Settlement Checklist

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Carrier settlements represent one of the highest-risk financial activities within an insurance organization. Every settlement should be accurate, fully reconciled, approved, documented, and supported before payment is released. This checklist provides a standardized settlement workflow for agencies, MGAs, wholesalers, and program administrators.

Recommended Frequency: Weekly or based on carrier settlement schedules

Estimated Completion Time: 30–90 minutes per carrier

Settlement Dashboard

ActivityComplete
Carrier Statement Received
Premium Reconciled
Trust Verified
Commission Validated
Settlement Approved
Payment Released
Step 1

Carrier Statement Review

Verify:

  • Statement received
  • Statement period correct
  • Carrier identified
  • Statement complete
  • Missing pages investigated
Step 2

Premium Validation

Confirm:

  • New business included
  • Renewals included
  • Endorsements included
  • Cancellations included
  • Return premium included
  • Premium adjustments verified
Step 3

Trust Accounting

Verify:

  • Trust balance supports settlement
  • Outstanding trust differences resolved
  • Cash available
  • Trust reconciliation complete
Step 4

Commission Validation

Review:

  • Producer commissions
  • Broker commissions
  • MGA commissions
  • Manual overrides
  • Commission adjustments
  • Commission exceptions resolved
Step 5

Carrier Payables

Confirm:

  • Carrier payable balance
  • Previous settlement cleared
  • Outstanding balances explained
  • Settlement amount verified
Step 6

Reconciliation

Verify reconciliation between:

  • Policy system
  • Carrier statement
  • Trust ledger
  • Company payables
  • General Ledger

No settlement should proceed until every balance agrees.

Step 7

Exception Review

Investigate:

  • Missing policies
  • Duplicate transactions
  • Unapplied cash
  • Trust differences
  • Commission differences
  • Timing differences
  • Manual journal entries

Every exception should have a documented resolution.

Step 8

Approval

Confirm:

  • Supporting documentation attached
  • Controller approval
  • CFO approval (if required)
  • Payment authorization
Step 9

Payment

Verify:

  • ACH information
  • Payment amount
  • Payment date
  • Confirmation received
  • Settlement recorded
Step 10

Post Settlement Review

Confirm:

  • Carrier payable cleared
  • Trust balance updated
  • General Ledger updated
  • Settlement archived
  • Dashboard updated

Controller Questions

Before approving payment ask:

If the answer is no, settlement is not ready.

Warning Signs

Do not release settlement if:

Settlement KPIs

KPITargetActual
Settlement Accuracy100%
Trust Variance0
Open Exceptions0
Manual Adjustments
Settlement Cycle Time
Carrier Payment Timeliness100%

Deliverables

Before closing the settlement:

Related Playbooks

Schedule a PremiumAccounting.ai carrier settlement assessment to automate settlement workflows, eliminate spreadsheets, and post validated accounting entries into QuickBooks, Sage Intacct, Xero, or Workday.

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Frequently Asked Questions

Every settlement should be reviewed before payment is released according to the organization's settlement schedule.

Complete reconciliation between carrier statements, trust balances, policy activity, and accounting records before approval.

Yes. Every significant unexplained difference should be investigated before payment is released.

Approval requirements vary by organization, but many require controller review and, for larger settlements, CFO approval.

Carrier statements, reconciliation reports, commission reports, trust reconciliation, approvals, and payment confirmations.

PremiumAccounting.ai serves as the insurance accounting subledger between your policy administration system and your General Ledger, automating carrier settlements, premium reconciliation, trust accounting, commission validation, approvals, and financial reporting.