What billing occurs where the agent renders a statement to the insurer reflecting premiums which are owed to the insurer, less the agent's commission, and subsequently remits payment to the insurer…

Question

Options

• ADirect
• BPremium financing
• CAccount current
• DStatement

• A
  7% (2)
• B
  7% (2)
• C
  81% (22)
• D
  4% (1)

Explanation

Account current billing is the correct answer because it describes the precise process where an agent prepares a periodic statement (the "account current") summarizing premiums owed to the insurer, deducts their earned commission, and remits the net balance within agreed credit terms - the agent essentially acts as a temporary holder of funds before settlement.

Why the distractors are wrong:

• A. Direct billing - the insurer bills the policyholder directly, cutting the agent out of the premium collection process entirely.
• B. Premium financing - involves a third-party lender paying the full premium to the insurer while the policyholder repays that lender in installments; it's a loan arrangement, not an agent remittance method.
• D. Statement - a generic term for any document showing amounts owed; it's not a defined billing method in this context and doesn't capture the agent-nets-commission-then-remits workflow.

Memory tip: Think of "account current" like a restaurant server settling up at the end of a shift - they collected money on behalf of the house (insurer), kept their tips (commission), and handed over the rest. The word current signals it's an ongoing, periodic reconciliation between agent and insurer.

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