Direct and Assumed Premium
Premium written and earned by an Insurance Company for direct and assumed property and casualty policies require specific journal entries to reflect the coverage written at the policy effective date and the premium earned over the term of the policy period.
The timing of when the premium is collected requires unique accounting considerations, depending on if it is collected on or in advance of the policy effective date, or over time on an installment basis. Different journal entries are also required for installment premiums for statutory-basis financial statements.
