Premium Trust Account Reconciliation
Premium trust reconciled every month — and ready for your regulator
A focused premium trust reconciliation engagement, or a defined component of monthly bookkeeping, that compares trust assets against the trust liabilities they cover. Scope and pricing show the work once, with an exception log and a dated statement the principal broker keeps on file.
What you get
- Monthly trust bank reconciliation
- Trust-asset vs trust-liability comparison
- Surplus / shortfall reporting with an exception log
- Regulator-ready trust reconciliation statement
- Guidance on clearing identified trust exceptions
What changes for your brokerage
- A clear monthly read on your trust surplus or shortfall position
- Trust reconciliation completed on a fixed monthly schedule
- Exceptions and aged items surfaced before they become problems
- Regulator-ready trust reconciliation statements on file
- Less personal risk for the principal who signs off
What the monthly reconciliation contains
What actually gets reconciled
Every month we reconcile the trust bank account to the general ledger, then compare trust assets against the trust liabilities they're supposed to cover: premium collected and not yet remitted to insurers, return premium owing to clients, and any other client money sitting in the account. That comparison, not the bank reconciliation on its own, is what tells you your trust position.
What the principal receives
A dated trust reconciliation statement containing the bank reconciliation, the trust asset versus trust liability comparison, the surplus or shortfall figure, and an exception log of aged and unresolved items. The supporting detail sits behind it, so nothing is summarized away if your regulator asks to see the work.
How exceptions are handled
Items that don't clear are logged with the date they arose, the amount, and what appears to be causing them. They stay on the log until they're resolved, and they're aged so a pattern is visible early. Nothing comes off the trust reconciliation quietly.
How a shortfall is handled
If trust assets don't cover trust liabilities, we say so in writing that month, with the exception log showing what's driving it. Funding, remediation and any notification to your regulator are decisions for the principal broker. Confirm your reporting obligations and timelines with your provincial regulator, because they differ by province and can change.
Where our line sits
We reconcile and document. We don't move money, we aren't signatories on the trust account, we don't file with your regulator on your behalf, and we don't perform audits or reviews of the trust account. Trust compliance stays with the principal broker. Our job is to make sure they aren't signing off blind.
Trust rules are provincial
Trust requirements are set province by province: Ontario brokerages answer to RIBO, British Columbia agencies to the Insurance Council of British Columbia, Alberta brokerages to the Alberta Insurance Council, and Quebec firms to the Autorité des marchés financiers. Account structure, required reconciliation frequency and any reporting are set by your regulator and can change, so we build the file to support what your regulator asks for and confirm the specifics with you.
Who does what
BrokerLedger does
- Code trust receipts and disbursements for the month
- Reconcile the trust bank account to the general ledger
- Build and maintain the trust liability schedule
- Compare trust assets to trust liabilities and report the surplus or shortfall
- Maintain the exception log and age unresolved items
- Deliver a dated reconciliation statement and keep the supporting detail on file
Your brokerage does
- Hold and operate the trust account. We reconcile it; we don't move money.
- Approve trust disbursements and any transfer between trust and operating accounts
- Decide on funding and remediation if a shortfall is reported
- Make any filing or notification your regulator requires, as the principal broker
- Tell us about changes to licensing, ownership structure or trust banking
- Engage your external accountant for any audit, review or regulator-required report
A sample monthly trust calendar
| When | What happens |
|---|---|
| Business day 1 to 2 | Trust bank statement pulled. Trust receipts and disbursements coded for the month. |
| Business day 3 to 5 | Trust bank reconciliation completed, with outstanding items listed by date. |
| Business day 5 to 7 | Trust liability schedule built: premiums payable to insurers, return premium owing to clients, and other client money held. |
| Business day 7 | Trust assets compared with trust liabilities, and the surplus or shortfall figure calculated. |
| Business day 8 | Exception log updated and aged, with new items recorded by cause and amount. |
| Business day 10 | Trust reconciliation statement delivered to the principal broker, with a written note on anything needing a decision. |
Common trust exceptions and how they get handled
| What we find | How it's handled |
|---|---|
| A stale outstanding cheque to an insurer | Traced back to the payable it relates to and confirmed with the carrier, then reissued or reversed with your approval. It stays on the exception log until it clears. |
| Client premium deposited into the operating account | Identified in the month it happened and quantified, with the correcting entry and the transfer into trust both documented. |
| Brokerage funds sitting in the trust account | Quantified and reported so the principal can decide. What may be held in trust and when it can be withdrawn is set by your regulator, so we report the amount rather than instruct you to move it. |
| Return premium owed to a client and not yet paid | Carried as a trust liability until it's paid out, and aged on the exception log so it isn't forgotten. |
| An unidentified deposit in the trust account | Held as a trust liability until it's matched to a policy or a client. Unmatched items are listed by date and amount rather than absorbed into the balance. |
| Trust assets below trust liabilities | Reported as a shortfall in that month's statement with the drivers itemized. Funding and any regulator notification are the principal broker's decisions. |
How we get started
-
Scoping call
We go through your trust banking structure, the province or provinces you're licensed in, transaction volumes, and how the trust account is reconciled today.
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Baseline reconciliation
We reconcile a recent month-end from scratch so both sides know the starting position. If there's a shortfall or an unexplained balance, you see it in writing before committing to ongoing work.
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Liability schedule built
The trust liability schedule is built from premiums payable, return premium owing to clients and other client money held, then agreed with you.
-
Exception backlog cleared or logged
Aged items from prior periods go onto the log with a proposed treatment for your approval. Nothing is cleared without a decision from you.
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Standing monthly cycle
The reconciliation runs on the calendar above, with the statement delivered to the principal broker each month.
What we need from you to start
- The province or provinces you're licensed in, and your licence class
- Trust bank statements for the last twelve months, or read-only access
- Your current trust reconciliation, if there is one, and the last month it was completed
- The premiums payable schedule and any return premium owing to clients
- A list of every account holding client money, including secondary trust accounts
- Access to Applied Epic, including the accounting module
- Any correspondence or requirements from your regulator that affect the reconciliation
Is this the right fit?
A good fit
- Brokerages that can't say today whether trust assets cover trust liabilities
- Principal brokers signing trust attestations without a reconciliation behind them
- Trust accounts carrying aged outstanding items nobody has cleared
- Brokerages that reconcile the trust bank but never compare it to the liability
- Firms preparing for a regulator review, a lender, or a sale
Not what we do
- Audits, reviews and regulator-required assurance reports. We don't provide assurance.
- Moving money, signing on the trust account, or authorizing disbursements.
- Filing with your regulator on your behalf.
- Legal advice on a trust deficiency.
Trust reading and provincial requirements
- Premium trust accounting in Canada The full guide to how trust accounting works in a brokerage.
- What happens in a trust shortfall Consequences, and what a principal broker should do first.
- RIBO trust account requirements Ontario's trust requirements, in one page.
- Premiums payable to insurers The largest line in most trust liability schedules.
- Ontario brokerages (RIBO) Trust and reporting expectations under the Registered Insurance Brokers of Ontario.
- British Columbia agencies (Insurance Council of BC) Trust expectations under the Insurance Council of British Columbia, with BCFSA regulating insurers.
- Alberta brokerages (Alberta Insurance Council) Trust expectations under the Alberta Insurance Council.
- Quebec firms (AMF) Trust expectations under the Autorité des marchés financiers, alongside ChAD for conduct.
- Brokerage accounting glossary Every term used on this page, grouped by topic, with where it shows up in Applied Epic.
The CPA who builds your file knows brokerage accounting
BrokerLedger is CPA-led and works inside Applied Epic. Our services are shaped by how a brokerage's books actually move — agency bill versus direct bill, commission income, producer compensation — not what a generic small-business bookkeeper assumes.
Frequently Asked Questions
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