Insurance Carrier Settlement Checklist
Why Carrier Settlement Needs a Checklist
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
| Activity | Complete |
|---|---|
| Carrier Statement Received | |
| Premium Reconciled | |
| Trust Verified | |
| Commission Validated | |
| Settlement Approved | |
| Payment Released |
Carrier Statement Review
Verify:
- Statement received
- Statement period correct
- Carrier identified
- Statement complete
- Missing pages investigated
Premium Validation
Confirm:
- New business included
- Renewals included
- Endorsements included
- Cancellations included
- Return premium included
- Premium adjustments verified
Trust Accounting
Verify:
- Trust balance supports settlement
- Outstanding trust differences resolved
- Cash available
- Trust reconciliation complete
Commission Validation
Review:
- Producer commissions
- Broker commissions
- MGA commissions
- Manual overrides
- Commission adjustments
- Commission exceptions resolved
Carrier Payables
Confirm:
- Carrier payable balance
- Previous settlement cleared
- Outstanding balances explained
- Settlement amount verified
Reconciliation
Verify reconciliation between:
- Policy system
- Carrier statement
- Trust ledger
- Company payables
- General Ledger
No settlement should proceed until every balance agrees.
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.
Approval
Confirm:
- Supporting documentation attached
- Controller approval
- CFO approval (if required)
- Payment authorization
Payment
Verify:
- ACH information
- Payment amount
- Payment date
- Confirmation received
- Settlement recorded
Post Settlement Review
Confirm:
- Carrier payable cleared
- Trust balance updated
- General Ledger updated
- Settlement archived
- Dashboard updated
Controller Questions
Before approving payment ask:
- Can every premium transaction be traced?
- Does trust support this settlement?
- Are commissions correct?
- Have all exceptions been resolved?
- Would I approve this payment if it were my own money?
If the answer is no, settlement is not ready.
Warning Signs
Do not release settlement if:
- Carrier statement missing
- Trust variance unresolved
- Outstanding reconciliation differences
- Large manual journal entries
- Unapplied cash remains
- Commission exceptions unresolved
- Supporting documentation missing
Settlement KPIs
| KPI | Target | Actual |
|---|---|---|
| Settlement Accuracy | 100% | |
| Trust Variance | 0 | |
| Open Exceptions | 0 | |
| Manual Adjustments | ||
| Settlement Cycle Time | ||
| Carrier Payment Timeliness | 100% |
Deliverables
Before closing the settlement:
- Settlement approved
- Payment released
- Accounting updated
- Documentation archived
- Dashboard refreshed
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.