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 ?
An insurance enterprise shall recognize a liability for the unearned premium revenue at the inception of a financial guarantee insurance contract.
Previously, it was the IRS's position that such amounts should be included as part of the unearned premium reserve subject to the 20% reduction.
Under the agreement, the unearned premium reserves on ANV s marine and energy business will be moved to Tower Group and was earlier written from its New York office.
However, the combined ratio is above the company s historical trends and reflects its increased level of unearned premium reserves driven by the introduction of IFRS, forthcoming UAE regulatory requirements and increased business retention.
The collateralization should be for an amount equal to the captive insurance company's ultimate expected losses plus unearned premium reserves.
The implementation of automated unearned premium calculation to reinstate the old manual method resulted in extra provision of around BD270,000.
Another favorable financial statement benefit relates to any ceding commissions received in respect of year-end unearned premium balances.