Insurance Acounting query (minimum earned premium policy)

[tobycm]

Normally earned/unearned premium gets calculated on pro-rata basis.

My question is, if the policy is on short rate or is a minimum earned premium policy; for accounting purpose will the earned premium still be calculated on pro-rata?

In other words, let’s say for a 100% minimum earned policy (annual) with a premium of 1,200$; the complete premium is earned on the policy issuance date itself. So for accounting purposes, will the complete 1,200$ be considered as earned in the next accounting period after the policy issuance or will it be 100$ (considering monthly accounting period)?

Thanks.....

[rcenters]

For whose accounting purposes?

[wariline]

That sounds like an accounting question...but I doubt the company will recognize the full amount as earned at inception - there's always a chance the carrier cancels the policy, which they'll have to give a refund to the insured.