#1
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Geography on the P&L
SSAP 6 paragraph 10. regarding premiums receivables states that if it is probable the balance is uncollectible, any uncollectible receivable shall be written off and charged to income.
The guidance doesn?t state if it should be written off to premium income or a bad debt account. We recorded the entry as follows: Debit Line 28 P&L - Premiums balances charged off Credit Line 15.1 Balance Sheet - Uncollected premiums and agents? balances Our questions is as follows: Should the P&L offset be a reduction to Premium income line 1 instead of Line 28 Premium balances charged off? |
#2
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Premium Balances written off
Hello Fran,
Please note NAIC instructions for page 4, line 28 as follows: Line 28 Net Gain or (Loss) from Agents or Premium Balances Charged Off Include:Agents or premium balances determined to be uncollectible and written off as losses. Also include recoveries during the current year on balances previously written off. Given the facts and circumstances you provided I would believe your entry is correct. Charge page 4 line 28 , NOT page 4, line 1 premium. This line, page 4 , line 28 is specifically for agents balances or premium balances charged off. See instructions. Regards, Glenn S Sackett
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Glenn Sackett Booke Seminars Life Instructor |
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