What is premium payable to insurers?

Premium payable to insurers is the liability for premium a brokerage has billed or collected from clients but not yet remitted to the carrier, net of the brokerage’s commission. It is what you owe each insurer for business you placed and collected on.

It arises only in agency bill, where the brokerage invoices the client, collects the premium (usually into trust), keeps its commission, and remits the balance to the insurer. In direct bill the insurer collects the premium itself, so no payable is created.

What you should be able to say about it at any time:

• The total owed, and how it’s split by carrier.
• An aged schedule — what’s owed, by age — so old or stuck items surface.
• Trust coverage — that the trust bank balance covers premiums payable plus other trust liabilities.

The discipline matters because premium payable is a core part of what the brokerage owes out of trust. If commission is swept to operating before payables are settled, or premiums are remitted before clients pay, trust can fall into shortfall — a serious compliance problem under provincial broker rules. Confirm your specific trust requirements with your provincial regulator.

Old items on the schedule almost always signal an error: a policy that cancelled but was never reversed, a remittance applied to the wrong carrier, or an unresolved statement difference. They are best caught through monthly carrier reconciliation rather than at year-end.

For how premium payable is created and cleared alongside trust and commission income, see our agency bill vs direct bill accounting guide.