Policyholder Dues

[AmyL-FUMIND]

Our company receipts dues from our insured on behalf of an affiliate. We then turn around and pay these dues to the affiliate every week. We are in the process of converting to a new software and plan to have a new receivable for the dues and then a corresponding payable to the affiliate. Where would we list the receivable from our insured on Page 2? Would we include on line 23 even though it is not being received from a parent, sub, or affiliate and instead from our insured? We do not want to include in premiums receivable, because the dues are totally separate from that amount. I assume the corresponding payable would be on Page 3 line 19, is that correct?

When dues are billed we book the receivable, but until we collect we would not pay them, so timing of this could increase the balance of the two accounts.

Any advice on this would be extremely helpful.

Thanks,
Amy

[Taylor]

I am not sure that these balances should be recorded as receivables and payables on the insurance company's balance sheet. It is merely acting as a collection agent for the affiliate. I would base this on the guidance in SSAP 35R when the insurance company is acting as a collection agent for the state (see paragraph 12) and on the guidance in SSAP 6 which says not to reflect as a receivable any premiums billed before the effective date (see paragraph 6, footnote 1 at end of first sentence). Neither of these is right on point with your dues question but hit around it. Certainly you would have a payable to affiliate for any dues collected and not yet remitted.