Insurance carriers can review MGA bordereaux faster by checking each row against the terms of the delegated authority agreement when the file arrives, then sending only the discrepancies to auditors with the supporting records attached. Auditors spend their time on the rows that need judgment, and they still make every decision. For an insurance carrier, software that compares these records with the contracts cut quarterly auditing and reconciliation from five people working for a week to one person working for a day.
What a bordereaux review checks
A managing general agent (MGA) binds policies, and sometimes handles claims, under authority delegated by the carrier. Each month or quarter it sends bordereaux: a premium bordereau listing the risks it bound, with the premium, taxes, and commission on each, and a claims bordereau listing claims, payments, and reserves.
The carrier’s delegated authority team checks that each risk falls within the agreed classes, territories, limits, and rates. It checks that commission matches the agreement, that reported premium matches the cash received, and that claims stayed within the MGA’s claims authority. Done by hand, this means opening each spreadsheet, matching its columns to the carrier’s layout, looking up contract terms, and sampling rows. Most of the time goes to reformatting and lookups, and a sample can miss the rows that matter.
Recording the contract terms
Start with the binding authority agreements. Record the terms each check needs: permitted classes and territories, maximum limits, rates or rating rules, commission percentages, and claims authority limits. Keep a reference to the clause each term came from, so a reviewer can see why a row was flagged.
MGAs often send files in their own layouts, so map each MGA’s format to one internal layout. Set up the mapping once per MGA and update it when the MGA changes its template. Check completeness as soon as a file arrives: missing fields, rows that do not add up to the stated totals, and dates outside the reporting period. Sending those problems back to the MGA early saves a round of questions at quarter end.
Checking every row
Once the contract terms and the bordereau are in the same format, software can check every row. For each discrepancy, the reviewer should see the row, the contract term it was checked against, the calculation, and related records such as the commission statement, the premium payment, or the claim file. Rows that match need no individual review, although the team may still sample them.
Some checks need records that arrive later, such as cash received at the end of the period. Run each check once its inputs are complete enough for someone to act on the result.
Auditors make the decisions
A discrepancy can come from an MGA error, an ambiguous clause, a late endorsement, or a mistake in the check itself. The auditor decides which it is, records the decision, and sends findings to the MGA. Keep those decisions. They become the examples you test against when contract terms or rules change.
The StrataEdge Reconciliation Platform compares bordereaux, commissions, premiums, and claims with the contracts, shows the evidence, and routes discrepancies to auditors for a decision. For the carrier described above, manual checks found that 99 percent of outputs met audit requirements, compared with 90 percent under the prior process. Read the insurance case, see how the platform works, or read about our insurance work.