Why an Insurance-Specific COA Matters

A generic chart of accounts cannot capture the realities of premiums, fees, agency bill versus direct bill, carrier payables, producer commissions, taxes, and premium trust cash. The result is messy reconciliations and unreliable reporting. An insurance-specific COA gives you clean audit trails, faster closings, and confidence that every policy event posts correctly from quote to cancellation.

If you are standing up Expert Insured, start with Insurance-Specific COA Setup to align account structure with automated posting rules and trust accounting controls.

Design Principles That Keep You Out of Rework

• Separate money types. Premium, fees, taxes, commissions, and surcharges need distinct accounts. Never co-mingle trust and operating activity.
• Model both billing methods. Create clear paths for agency bill and direct bill, including clearing accounts for cash application and carrier settlements.
• Reflect the policy lifecycle. Define posting for new business, endorsements, renewals, cancellations, reinstatements, write-offs, and refunds. Use the policy lifecycle overview to ensure no event is missed.
• Use dimensions, not endless accounts. Track carrier, line of business, state, branch, and producer via segments or dimensions so the COA stays readable.
• Plan for reversals. Mirror every revenue and payable account with reversal logic to unwind transactions cleanly.
• Keep tax and fees auditable. Break out premium taxes, stamping, surplus lines, and service fees by jurisdiction.

Setup Checklist

• Draft account groups that mirror your business model, then confirm against your agency or MGA agreements.
• Create premium trust bank accounts and related clearing accounts for receipts, disbursements, and suspense.
• Define separate GL accounts for:
  • Premium written and earned, policy fees, taxes, and surcharges
  • Carrier payables and recoverables
  • Producer commissions payable and clawbacks
  • Unearned and deferred balances where applicable
• Map each policy event to debit and credit entries, covering new business, endorsements, renewals, cancellations, and reinstatements.
• Decide dimensional breakdowns by carrier, LOB, state, branch, and producer, then lock naming conventions.
• Build product-to-account and fee-to-account mappings in your system, including agency bill vs direct bill logic.
• Test with sample transactions across quoting, binding, invoicing, cash application, and settlements. Reconcile to the penny.
• Implement change controls and approvals before you go live.

In Expert Insured, Insurance-Specific COA Setup provides templates and guardrails so you can configure posting once and apply it consistently across entities.

Common Pitfalls to Avoid

• Too many accounts. Use dimensions for reporting granularity instead of proliferating GL codes.
• Mixing trust and operating funds. Keep separate banks, GL series, and approvals for trust activity.
• One catch-all fee or tax account. Split by type and jurisdiction to pass audits and reduce rework.
• Ignoring reversals and write-offs. Without explicit mappings, your subledger and GL will drift.
• No plan for premium finance and installments. Define the clearing and fee impact upfront.
• Treating carrier settlements as a single net entry. Post premium, commissions, taxes, and adjustments separately for clear reconciliation.

Tie Your COA to Policy Workflows

Your COA only delivers if it mirrors operational flow. Align GL mappings with policy management steps, from intake and quoting to bind, endorsements, and renewal. That alignment lets teams work in the front office while accounting stays accurate in the background.

• Use policy management to standardize events that trigger postings.
• Validate mappings against the policy lifecycle overview so cash, revenue, and payables move in sync as the policy changes.

With Expert Insured, automated postings fire from everyday actions like creating and requesting quotes and issuing endorsements, which means fewer manual journals and faster month-end.

Governance That Scales

• Assign ownership, require change requests, and version your COA.
• Schedule periodic reviews tied to new products or carrier appointments.
• Monitor reconciliations and exception queues.

Strong governance keeps your first build right as the business grows.