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 ?
The unearned premiums reserve was $2.1 billion at the end of the quarter, essentially flat with the prior quarter.
The bank is accused of opening millions of unauthorised accounts, improperly charging auto loan customers and failing to ensure that customers received refunds of unearned premiums.
They also contended Wells Fargo failed to ensure that customers received refunds of unearned premiums on optional auto-finance products and incorrectly charged customers for mortgage rate-lock extension fees.
The combination of unearned premiums and deferred revenues on the balance sheet grew by $94.7 million or 19.1%, from June 30, 2017 to June 30, 2018 as we continue to grow credit protection and warranty written premiums.
"While we expect to ultimately recover a substantial portion of our unearned premiums, the timing and amounts are unclear at this time."In light of the potential impact to the Company's insurance coverage, the Company is adjusting the allowance for loan losses attributable to its student loan portfolios for the current quarterly period ending June 30, 2018.
Technical profit dropped by 71pc from BD1.48m to BD434,000 due to the increase in net claims reported during the period from BD4.2m to BD7.8m and a huge increase in unearned premiums reserves (BD2.3m).
Agents and producers are not supposed to "use premium monies owed to HealthyCT for refund of unearned premiums or for any purpose other than payment to the rehabilitator," according to the order.
Increase in technical provisions and unearned premiums contributed to the growth in liabilities, the QCB said in its '2015 Financial Stability Review'.
The authors cover statutory basis reserves, tax basis reserves, qualification as a life insurance company, life insurance reserves, unearned premiums and unpaid losses and a wide variety of other related subjects.
That is, premiums paid for the insurance coverage provided by the captive are deductible to the affiliate, while the captive insurance company may defer recognition of unearned premiums (albeit with a 20% "haircut") and deduct unpaid (discounted) losses.
In all cases, Toups says, check the conditions under which you are allowed to drop the gap coverage and whether you get a refund of the unearned premiums.