229 - Insurance Income Receivables

Current Assets

Receivables

Synopsis

Account 229

Debits

Credits

  1. The total amount of insurance commissions earned on insurance policies sold by the retailer.

  2. The portion of insurance income that becomes free of any contingencies.

  1. The amount received in settlement of insurance commissions.

  2. The amount of deferred insurance commissions which is being held by an insurance company to apply against future contingencies.

 

 

Remarks:

Insurance Income Receivables represents the amount of commission due the dealer upon which immediate claim can be made.

 

Each provider will have its own participation and payment plan.  Income should be calculated and recorded on an individual contract basis at the time the sale is recorded in the vehicle sales journals.

 

A provider will ordinarily furnish the dealer the amount of insurance commission earned on each contract.  The retailer should obtain a monthly (or, at least, quarterly) statement from each provider, indicating in detail each interim charge and credit since the last statement rendered.

 

Separate general ledger sub-accounts should be established for each provider (for example, 229A – ABC Insurance, 229B – XYZ Life & Health Co., etc.).

 

The balance of this account should be reconciled upon receipt of each statement, clearly defining the current and deferred amounts.  Any variances should be located, reported to F&I management, their source determined, and action promptly made to either rectify the debt, or reclassify the unpaid or overpaid balance.

Note: