Premium Reconciliation Checklist
What This Playbook Standardizes
This playbook standardizes the premium reconciliation process for insurance agencies, MGAs, wholesalers, program administrators, and carriers.
The objective is simple:
Every premium dollar should be traceable from policy issuance through customer payment, trust accounting, carrier settlement, and the General Ledger.
Recommended Frequency
- Daily for operational review
- Weekly for management review
- Monthly before financial close
Estimated Completion Time: 30–90 minutes per reconciliation cycle
Reconciliation Status Dashboard
| Activity | Complete |
|---|---|
| Premium Transactions Reviewed | |
| Customer Payments Applied | |
| Carrier Statements Matched | |
| Trust Accounting Verified | |
| Carrier Payables Balanced | |
| Commission Verified | |
| General Ledger Balanced |
Premium Activity
Verify:
- New business processed
- Renewals processed
- Endorsements processed
- Cancellations processed
- Return premium processed
- Audit premium processed
- Premium adjustments approved
Customer Payments
Confirm:
- Customer payments received
- Cash applied correctly
- Partial payments reviewed
- EFT activity posted
- ACH activity posted
- Outstanding unapplied cash reviewed
Carrier Statements
Review:
- Carrier statement imported
- Statement period verified
- Missing policies investigated
- Duplicate transactions reviewed
- Carrier adjustments identified
Trust Accounting
Verify:
- Trust balance supports carrier obligations
- Trust reconciliation complete
- Trust variance investigated
- Outstanding trust exceptions resolved
Carrier Payables
Review:
- Outstanding carrier balances
- Settlement schedule
- Pending settlements
- Settlement approvals
- Payment status
Commission Validation
Verify:
- Producer commissions
- Broker commissions
- MGA commissions
- Commission adjustments
- Manual overrides approved
General Ledger
Confirm:
- Premium balances agree
- Trust balances agree
- Carrier payables agree
- Commission balances agree
- Journal entries reviewed
Exception Review
Investigate immediately:
- Unapplied cash
- Missing carrier statements
- Trust differences
- Duplicate payments
- Duplicate policies
- Commission variances
- Settlement differences
- Manual journal entries
No reconciliation should be considered complete while unresolved exceptions remain.
Reconciliation Health Score
| Metric | Target | Actual |
|---|---|---|
| Match Rate | >99% | |
| Unapplied Cash | Minimal | |
| Settlement Accuracy | 100% | |
| Trust Variance | 0 | |
| Open Exceptions | 0 | |
| Manual Adjustments |
Controller Questions
Before approving reconciliation ask:
- Can every carrier balance be explained?
- Can every trust balance be explained?
- Can every commission be traced?
- Can every payment be identified?
- Would I be comfortable approving settlement today?
If the answer is no, reconciliation is not complete.
Common Reconciliation Problems
Review immediately if:
- Carrier balances continue changing
- Trust balance fluctuates unexpectedly
- Reconciliation backlog increases
- More manual journal entries appear
- Unapplied cash continues growing
- Settlement approval is delayed
These usually indicate process problems-not accounting problems.
Best Practices
Successful finance organizations:
- Reconcile daily
- Resolve exceptions immediately
- Import carrier statements electronically
- Standardize reconciliation procedures
- Automate transaction matching
- Monitor reconciliation dashboards continuously
- Review trends weekly
- Minimize manual adjustments
Deliverables
At completion, confirm:
- Premium reconciled
- Trust reconciled
- Carrier reconciled
- Commissions validated
- Settlement approved
- General Ledger validated
Schedule a PremiumAccounting.ai workflow assessment to automate premium reconciliation, eliminate spreadsheets, and post validated accounting entries into QuickBooks, Sage Intacct, Xero, or Workday.