Glossary
Direct Bill vs Agency Bill
Two billing arrangements between carrier and agency: direct bill (carrier invoices the client) versus agency bill (the agency invoices, collects, and remits premium to the carrier).
Direct bill is the simpler arrangement: the carrier bills the policyholder directly and pays the agency a commission. The agency never touches the premium dollars, so there's no trust accounting risk on those policies.
Agency bill is more involved: the agency invoices the client, collects the premium into its trust account, deducts its commission, and remits the net to the carrier. Agency-bill policies create the bulk of reconciliation work because the agency is responsible for the money flow.
Most agencies have a mix of both. Reconciling them in separate workflows (rather than commingling them) keeps trust-account compliance clean and makes producer commission tracking simpler.
See also
- Trust Account — A segregated bank account where an insurance agency holds premiums collected from clients on behalf of carriers. Strictl…
- Premium Reconciliation — The process of matching the premiums collected by an insurance agency to the deposits and commission statements received…