Trust Account
Outsourcing Technology
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The concept of trust account management
outsourcing is new in the P&C insurance industry. It has
never been attempted. It has become possible with the advent
of Trust Ledger Accounting and
Trust Account Outsourcing Technology.
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Premium funds are placed in a separate ledger of
accounts, outside the agency’s general ledger, and reported on
a separate Balance Sheet.
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TL
accounting and automation of the
trust account operation made possible premium and commission
management to be outsourced to a third party, in the same way
agencies outsource the payroll. Premium and commission
management was branded by Paulmar as “trust account
management”.
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The benefits of trust account outsourcing are
significant:
v
Agencies can focus on sales and
service;
v
Agencies’ workload is significantly
reduced so that agencies can:
§
Either lower operating
costs or
§
Grow their business
with no additional payroll;
v
Data and accounting records are complete and
reliable;
v
Agencies will fully comply with fiduciary
obligations;
For better
understanding of trust account management concept click on the
link below:
From Concept to Practice: Insurance Trust Account
Management
