Unearned Premium


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Unearned Premium

A premium paid on an insurance policy before it is due. For example, one may pay six months' worth of premiums in January instead of paying each month from January to June. If the policyholder cancels before February, the insurer should refund the premiums for March, April, May and June. For that reason, they are listed as liabilities on the insurer's balance sheet.
References in periodicals archive ?
* Suggests that ITR plus unearned premium might determine FMV for policies that have been in force some time and on which future premiums are due, with the same caveat regarding a contract with an unusual nature.
Each transaction was structured as a purchase of renewal rights on a selected group of reinsurance contracts and, in the ease of the LaSalle and HartRe transactions, a quota share reinsurance of the unearned premium reserves associated with such contracts.
At closing, Enstar assumed approximately USD 1.3bn of net loss and loss adjustment expense reserves and unearned premium reserves.
A provision of the deal calls for Tokio Marine to provide a $500 million adverse development cover to RenRe, protecting TMR's stated reserves at closing (including unearned premium reserves).
Enstar will assume approximately $1.3 billion of net loss and loss adjustment expense reserves and unearned premium reserves upon closing.
Its highly diversified insured portfolio generates predictable future revenue from its embedded $284 million net unearned premium reserve, which is part of MACs $1.1 billion investment portfolio.
That approach allows liabilities to be measured initially by the premium that is being charged, similar to the current method of measuring the unearned premium reserve.
Before PPACA passed, nonprofit plans could use Internal Revenue Code Section (IRC) 833 to deduct 25 percent of their claims and expenses and 100 percent of their unearned premium reserves from their taxable income.
The loss reserves and unearned premium reserves prior to the sale of Essentia will stay with OneBeacon to be runoff.
Technical profit decreased by 3pc from BD2.27m to BD2.21m due to the change in unearned premium reserve method of calculation, which is more accurate and reliable.
The policy had been canceled, but the unearned premium had not been returned to the lender, the Bank of Star City, and payments on the loan had been missed.