View this article online: https://www.insurancejournal.com/news/national/2003/02/24/26440.htm
PAULMAR Software, Inc. (www.paulmarsoftware.com) recently concluded the development of Trust Account Outsourcing TechnologyTM that makes possible, for the first time in the commercial insurance industry, the management of insurance trust account by a qualified outsourcing partner. The outsourcing of trust account operation is reportedly expected to increase the insurance agency’s profit margin by 40 percent or more.
The outsourcing model is supported by new proprietary Trust Ledger (TL) accounting that permits a complete segregation of fiduciary funds management from the management of business operating funds. Protocols for uniform financial reporting of trust account solvency have been developed and data records were structured to provide ample and accurate documentary evidence. Trust account solvency reports will be available on an “as needed” basis to agency managers and owners, insurance carriers, regulators, auditors, or due diligence consultants.
More than 65 TL accounts are used to fully capture the complexity of trust account operation and produce reliable financial reports, such as:
*Statement of Premium Receipts and Disbursements, or Premium Float Statement;
*Trust Account Balance Sheet;
*Trust Account Solvency Analysis; and
*Accounting audit trails
Critical processes such as management of premium endorsements, financed premiums, interim and final audits, returned premiums, and premium credits and refunds have been automated. The company statement reconciliation and commission income transfer processes have been also automated. Self-administering and fully automated billing and follow-up procedures will secure full control over premium receivables and bank deposits. The concept of “aging” receivables is abandoned and insurance producers will be guaranteed the receipt of transacted premiums on or before the due dates of the policy schedule.