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Demo Northstar Risk Partners: an insurance-brokerage day
Demo Northstar Risk Partners arranges commercial property, marine cargo, employee medical, and cyber policies for clients in the UAE, India, Kenya, and the UK. It quotes several insurers, binds cover, collects premium into client-money accounts, pays insurers, earns commission, manages endorsements and cancellations, supports claims, and reports each legal entity separately while management views USD group results. OSERP links the client, opportunity, quote, policy, premium, trust receipt, insurer settlement, commission, bordereau, claim, renewal, and general ledger.
1. Model entities, branches, books, and client-money controls
Create a tenant for Northstar Group, then legal companies for each regulatory jurisdiction. Branches represent offices; classes of business, producers, teams, and insurer panels are reporting dimensions. Configure functional and reporting currencies, tax registrations, fiscal periods, numbering series, operating bank accounts, client-money or trust accounts, commission accounts, and approval policies.
| Setup field | Demo value | Impact |
|---|---|---|
| Company | Northstar UAE Brokers LLC | Local statutory books |
| Branch | Dubai Corporate | Producer and client reporting |
| Client-money bank | UAE-TRUST-01 | Premium custody and reconciliation |
| Operating bank | UAE-OPS-01 | Expenses and commission cash |
| Class | Marine cargo | Product and insurer terms |
| Currency | AED | Local invoices and receipts |
| Group currency | USD | Consolidated management view |
| Regulatory period | Q3 2026 | Filing and bordereaux cut-off |
Client-money funds are not ordinary revenue. Receipt, transfer, insurer payment, refund, and fee withdrawal each require a purpose, client or policy reference, bank reference, currency, and approval. A producer can create a quote but cannot release trust funds or change bank details without a second authorised user.
2. Create a client and prospect record
The client master stores legal name, trade licence, tax registration, address, risk locations, beneficial owner, sanctions screening result, industry, contacts, preferred currency, credit terms, bank, and status. A contact is linked to a role such as risk manager, finance approver, or claims contact. Sensitive identity and bank fields have restricted visibility.
An opportunity stores client, class, period, estimated premium, target inception, incumbent insurer, producer, servicing team, source, probability, and next action. Statuses are Lead → Qualified → Submission → Quoted → Bound → Lost, with On hold and Withdrawn controlled by reason. A lost opportunity preserves competitor, price, coverage, and reason for renewal analytics.
Example: GulfLink Logistics requests marine cargo cover for USD 18 million annual shipments. Northstar stores routes, commodities, warehouse locations, loss history, requested limits, deductibles, policy currency, and submission deadline. The risk data is versioned so an underwriter can prove which exposure was presented.
3. Build a quote comparison and bind cover
The submission header stores client, class, risk period, currency, requested limit, deductible, insurer panel, commission target, tax treatment, and approval status. Quote detail rows store insurer, product, coverage, exclusions, limit, deductible, premium, fees, taxes, commission rate, validity, conditions, and attachment.
The comparison screen normalises insurer responses without losing original terms. It shows gross premium, broker fee, tax, commission, net insurer payable, payment terms, and coverage differences. A selected quote requires producer and compliance approval. Binding creates a policy record with policy number, insurer, effective dates, insured, risk objects, currency, premium, commission, tax, payment plan, documents, and status.
The policy status path is Draft → Bound → Active → Endorsed → Expired, with Cancelled, Lapsed, and Renewed controlled by effective date and reason. A policy cannot be active without insurer confirmation and required documents. Backdated binding requires authority and audit evidence.
4. Invoice premium, fees, and taxes correctly
A client invoice stores policy, client, payer, branch, currency, premium, broker fee, tax code, commission component, due date, instalment, trust-account instruction, and collection owner. Detail rows identify coverage, risk location, insurer, gross premium, fee, tax, and client share.
| Invoice field | Demo marine value | Why it matters |
|---|---|---|
| Policy | NRP-MAR-26017 | Links invoice to cover |
| Gross premium | USD 42,000.00 | Insurer contract amount |
| Broker fee | USD 2,100.00 | Revenue under fee policy |
| Tax | AED-equivalent tax | Local compliance and reporting |
| Commission | USD 6,300.00 | Insurer receivable or accrual |
| Due date | 2026-10-15 | Collection and trust ageing |
| Account type | Client money | Restricts cash movement |
The billing engine separates insurer premium, broker fee, tax, and any deductible or financing charge. A client payment does not become broker revenue merely because cash arrived; revenue recognition follows the configured policy and service period. A credit note references the original policy and endorsement rather than editing history.
5. Receive, reconcile, and allocate client money
Trust receipts store bank, value date, payer, policy, client, currency, amount, external reference, fee, and allocation status. A receipt may be allocated across several policies or remain unapplied with an owner and ageing. Duplicate bank references are rejected idempotently.
For GulfLink, USD 44,100 arrives into the trust account. OSERP allocates USD 42,000 to insurer premium, USD 2,100 to broker fee, and records any tax treatment according to the legal entity. A bank charge is separately identified. The daily reconciliation compares bank statement, receipt, client ledger, insurer payable, and trust liability; a difference creates an exception, not a balancing journal to suspense without owner.
6. Pay insurers and account for commission
The insurer settlement statement groups bound policies, endorsements, cancellations, premium, tax, commission, brokerage, fees, and net payable by insurer and bordereau period. It stores insurer account, currency, payment reference, due date, approval, and supporting statement. A payment cannot exceed the approved trust balance or duplicate a statement reference.
Commission agreements store insurer, class, product, rate, sliding scale, effective dates, clawback rule, tax, and approval. Commission accruals link to bound or earned policies; commission receipts link to insurer remittance and statement. A cancelled policy creates a clawback event according to the agreement and preserves the original commission calculation.
7. Manage endorsements, cancellations, and renewals
An endorsement stores policy, effective date, request, reason, changed risk, old value, new value, premium delta, fee delta, tax, commission delta, approver, documents, and status. The policy snapshot before endorsement remains immutable. Premium increases create an additional invoice; decreases create a credit or refund workflow.
Cancellation stores request date, effective date, reason, short-rate or pro-rata method, unearned premium, insurer approval, client refund, commission clawback, and trust allocation. The system prevents a cancellation date before inception without an authorised correction.
Renewal records store prior policy, proposed terms, exposure change, loss ratio, insurer options, target date, producer, probability, and outcome. A renewal workflow alerts the owner 90, 60, and 30 days before expiry and carries forward only approved data.
8. Process claims and client funds without changing policy history
A claim record stores policy, client, loss date, notification date, location, claimant, insurer, reserve, currency, adjuster, coverage decision, documents, and status. Statuses are Notified → Registered → Under review → Accepted/Declined → Settled → Closed. Claim payments are insurer or client-money events, never a rewrite of the original policy premium.
For a USD 150,000 cargo loss, OSERP records notification, survey, reserve, deductible, insurer decision, client advance, final settlement, and recovery. A declined claim keeps the reason, clause, evidence, and appeal deadline. A partial settlement links paid and outstanding amounts and updates the client statement.
9. Produce bordereaux and regulatory reports
The bordereau header stores insurer, period, class, submission date, currency, record count, total premium, commission, tax, and status. Detail rows include policy, endorsement, client, risk country, inception, expiry, premium, commission, limit, deductible, claims, and cancellation. A control total must equal the underlying policy ledger before submission.
Regulatory extracts retain report version, source snapshot, preparer, reviewer, submission reference, correction history, and filing date. A rejected bordereau creates a correction version instead of changing the submitted file. Field-level lineage shows which policy or transaction produced each report cell.
10. Close multi-currency books and trust balances
Close reconciles policies to invoices, invoices to trust receipts, trust receipts to bank statements, insurer statements to payables, commission accruals to remittances, endorsements and cancellations, claims reserves, taxes, payroll, operating expenses, and intercompany balances. Each currency stores transaction rate, source, timestamp, realised FX, and revaluation status.
An AED company may collect USD premium, pay a UK insurer in GBP, and receive commission in USD. Revaluation affects open receivables, payables, and trust balances according to policy; it must not alter the original policy premium. Period lock prevents backdated endorsements or receipts. Corrections cite the original document, reason, approver, and effective policy.
| KPI | Before OSERP discipline | After OSERP discipline | Improvement |
|---|---|---|---|
| Quote-to-bind cycle | 8 days | 2 days | 75% faster |
| Trust allocation exceptions | 6.8% | 1.1% | 84% lower |
| Insurer statement reconciliation | 12 days | 3 days | 75% faster |
| Commission clawback accuracy | 89% | 99.1% | +10.1 points |
| Renewal conversion visibility | 71% | 96% | +25 points |
| Month-end close | 15 days | 5 days | 67% faster |
Practice challenge
Create Northstar UAE, a GulfLink marine opportunity, three insurer quotes, a bound policy, a premium and fee invoice, a trust receipt, insurer settlement, commission accrual, endorsement, cancellation, claim reserve, bordereau, multi-currency payment, renewal task, and close reconciliation. For every field, explain its type, length or precision, source, permission, validation, accounting impact, tax result, API identifier, exception path, and audit event.
Related: Reinsurance lab, AR Invoice field guide, AP Invoice field guide, GL mapping guide, Bank Reconciliation field guide, Multi-currency lab, and API cookbook.