Hi all, this is my first post.
I wanted to see if anybody has worked with opening a liabilty for premium cancellations or could point me in the right direction as regards to the accounting of such a liability(if at all possible).
I'm working with a line of business with a high rate of flat cancellations (all premium is returned) and as such monthly premium reports may report negative premium due to cancellations. Also, earned premiums are affected since previously "earned" premium is cancelled to inception.
I wanted to see if anybody has worked with opening a liabilty for premium cancellations or could point me in the right direction as regards to the accounting of such a liability(if at all possible).
I'm working with a line of business with a high rate of flat cancellations (all premium is returned) and as such monthly premium reports may report negative premium due to cancellations. Also, earned premiums are affected since previously "earned" premium is cancelled to inception.
Premium Cancellation Liability
