Unearned Premium Reserve

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Unearned Premium Reserve

An account into which an insurer deposits unearned premiums, which are paid on insurance policies before they are due. For example, one may pay six months' worth of premiums in January instead of paying each month from January to June. Unearned premiums are listed as liabilities on an insurer's balance sheet and regulators thus require insurance companies to maintain reserves to refund these amounts if necessary.
References in periodicals archive ?
The reduction was mainly due to the increased claims in fire, medical and marine insurances in Bahrain and Kuwait and also due to the increase in unearned premium reserves in motor insurance.
Insurers that qualify for IRC Section 833 tax treatment can deduct 25 of their claims and 100 percent of their unearned premium reserves from their taxable income.
Earnings in 2012 were negatively impacted by an increase in doubtful debt provisions and an adjustment in unearned premium reserves to comply with the draft UAE insurance regulation and the International Financial Reporting Standards (IFRS).
Tower will also buy from ANV unearned premium reserves related to the business, it said.
The loss reserves and unearned premium reserves prior to the sale of Essentia will stay with OneBeacon to be runoff.
This payment primarily represents existing loss reserves and unearned premium reserves for the portfolio, and therefore will not have a material impact on Radian's consolidated financial statements or Radian Asset's statutory capital position.
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.
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.
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.
Also, under the terms of the agreement, Ariel has agreed to provide First Mercury with full protection related to the runoff of Valiant's net loss and loss adjustment expense reserves and unearned premium reserves reflected on the closing date balance sheet.
The amount of this payment was determined primarily based on existing loss reserves and unearned premium reserves, and therefore is not expected to have a material impact on Radian's consolidated financial statements or Radian Asset's statutory capital position.
However, net profit in the period decreased to AED 72 million ($20 million) from AED 87 million ($24 million) compared to the same period last year, driven by the proactive implementation of draft UAE insurance regulation on unearned premium reserves and a provision for doubtful debt.