by The account current is a detailed statement detailing the financial performance of an individual insurance agent’s business over a specified period. These statements form the basis for the reconciliation of accounts between the insurer and the agent. The account current is the basis for the paper trail as premiums paid by policyholders travel between insurance provider, agencies, and agents.
An account current lays out the financial components of an insurance agent’s business in detail. The statement is usually comprehensive in that it specifies premium and claim performance at the individual policy level. The accounting also typically shows summary transaction information as a record of balances owed. These balances are due either to the insurance agent or the insurer depending on the balance of claims paid, the premiums that are written, the premiums returned, and commissions.
Summary items on the account current may include gross premiums, agency commissions, the net payable amount on the current statement, and payments made or received between each submittal of the accounting.
Individual line item columns per policy may include the name of the agent underwriting the policy, the policy number, the name of the insured party, the date of policy underwriting, and the premium amount for the insurance policy. Other items include the percentage of an agent’s commission, the actual dollar amount of the commission, and the net amount due to the insurer for that specific policy.
Situations when account current is prepared are:
- A consignee of goods can also prepare an Account Current, if the latter is to settle the account at the end of the consignment & interest is chargeable on outstanding balance.
- It is prepared when frequent transactions regularly take place between two parties. An example is of a manufacturer who sells goods frequently to a merchant on credit and receives payments from him in instalments at different intervals and charges interest on the amount which remains outstanding.
- It is prepared when two or more persons are in joint venture and each co-venture is entitled to interest on their investment. Also, no separate set of book is maintained for it.
- An Account Current also is frequently prepared to set out the transactions taking place between a banker and his customer.
