Finance in Insurance Intermediaries: What the FC Owns

Insurance intermediary finance is one of the more distinctive corners of the regulated sector, and the reason is a single concept that has no equivalent anywhere else in finance: risk transfer. Whether money held by a broker belongs to the client, to the insurer or to the firm changes the accounting, the regulatory obligation and the reconciliation entirely — and it is determined by terms of business agreements that finance did not write and frequently has not read. This guide sets out what a Financial Controller actually owns in a broker or MGA, where the sector-specific difficulty lies, and what the roles pay in 2026.

Client money under CASS 5

The defining feature of the role. Insurance intermediaries hold client money under CASS 5, which works differently from the CASS 7 regime most people mean when they say “client money”.

Risk transfer is the first thing to understand. Where a firm holds money as agent of the insurer under a written agreement, that money may not be client money at all — the insurer carries the credit risk and the premium is treated as received by them on payment to the broker. Where risk transfer does not apply, the money is client money and must be segregated. The same firm frequently has both, across different insurers and different products, which is why the calculation is more involved than it first appears.

Statutory and non-statutory trusts are the second. A non-statutory trust permits limited use of client money to fund premium in advance of receipt, subject to conditions; a statutory trust does not. The choice affects working capital, the calculation and the audit, and the firm’s trust deed governs it.

The client money calculation then determines whether the segregated balance is adequate, with any shortfall to be made good. Doing it correctly requires knowing, for every balance, which category it falls into — and that mapping is the work.

Our guide to CASS 7 versus CASS 15 covers why regime experience is not interchangeable, and CASS and client money the framework.

The other sector-specific work

Insurance Premium Tax. Charged on most general insurance premiums at standard and higher rates, and the intermediary sits in the collection chain. Errors are recoverable from the firm, and HMRC’s IPT guidance sets out the position.

Binder and delegated authority accounting. Where the firm underwrites on behalf of insurers, bordereaux reconciliation becomes a core monthly process — matching what was written and collected against what is reported and settled to the carrier. Differences age quickly and are painful to unwind.

Commission recognition. When commission is earned, how return premiums and mid-term adjustments are handled, and whether profit commission and contingent arrangements are recognised on a reasonable basis. This is where the sector meets IFRS 15 or the FRS 102 equivalent and where auditors focus.

Insurer and market settlement. Reconciling account current statements, managing aged debt with carriers, and the discipline of settling to terms.

And prudential requirements. Intermediaries are subject to capital resources requirements and reporting obligations, with the calculation depending on permissions and whether client money is held.

What the FC owns day to day

Beyond the standard control remit — close, balance sheet, statutory accounts, audit, team — the sector adds four things.

The client money calculation and reconciliation, on the required frequency, with evidence. Non-negotiable and dated.

The risk transfer mapping, kept current as terms of business agreements change. This decays silently and is a recurring audit finding.

The regulatory reporting cycle — returns, capital adequacy, and the client money and assets return.

And the CASS audit relationship, which is a separate engagement from the statutory audit with its own scope and its own findings. Our guide to the CASS audit covers what it involves.

Where the firm is small, the FC is frequently also the CASS oversight function — preparing, reviewing and reporting on their own work, which is a control weakness worth naming. Our guide to CASS oversight versus operations sets out the proportionate answer.

Where firms most often struggle

Risk transfer applied by assumption rather than by agreement. The commonest and most consequential error. If the terms of business agreement does not confer agency, the money is client money whatever the firm has assumed — and the shortfall is historic.

Unallocated cash. Premium received without a matched policy, sitting in the client account and ageing. Every broker has some; the question is how much and how old.

Bordereaux differences left to accumulate. Easier to resolve at one month than at nine.

Commission recognised too early, particularly on instalment and mid-term arrangements.

And key-person concentration — one person who understands the client money calculation, with the methodology undocumented.

Insurance intermediary finance salaries 2026

Two premiums sit on top: CASS 5 experience, which is the scarcest element and adds 10–15% over an equivalent commercial role; and MGA or delegated authority experience, where bordereaux and underwriting accounting narrow the pool further. Wider benchmarks are in our regulated-firm finance salary guide and the salary guides.

Backgrounds that work

Three routes produce credible candidates. Existing broker or MGA finance experience is the obvious one and the shortest pool. Practice auditors who have audited intermediaries arrive understanding risk transfer and the client money calculation from having tested them — an underrated and available source. And CASS 7 experience from investment firms, where the mindset transfers even though the mechanics differ; workable where someone in the firm knows CASS 5, and risky where nobody does.

Qualification is the baseline — ICAEW, ACCA or CIMA — and sector experience is what employers are actually buying. Our guide to hiring an FC for a broker or MGA covers the assessment in detail, and the insurance intermediary FC practice the search.