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📋 '''Debit note''' is a financial document issued within [[Definition:Insurance | insurance]] and [[Definition:Reinsurance | reinsurance]] transactions to formally request payment of [[Definition:Premium | premium]] from a buyer — whether an [[Definition:Policyholder | insured]], a [[Definition:Cedant | cedant]], or an intermediary in the chain. Functioning as the insurance industry's equivalent of an invoice, the debit note specifies the amount due, the policy or contract reference, the period of cover, and the payment terms. In [[Definition:London market | London market]] and international placement workflows, debit notes have historically served as a critical accounting control, linking the [[Definition:Placing slip | slip]] or [[Definition:Market reform contract | contract]] to the flow of funds through [[Definition:Insurance broker | broker]] accounts.

⚙️ Once a risk has been bound, the broker or intermediary issues a debit note to the party responsible for remitting premium. In traditional London market practice, debit notes flow through the [[Definition:Bureau | bureau]] system — now largely managed by platforms such as the [[Definition:Xchanging | Xchanging]]-originated processing infrastructure — where they are matched against [[Definition:Signing | signing]] data to confirm that the amounts agree with the terms on the contract. The debit note triggers corresponding [[Definition:Credit note | credit notes]] to the [[Definition:Underwriter | underwriters]] participating on the risk, reflecting their share of the premium. In direct insurance markets outside London, the debit note may be issued by the insurer itself or by a [[Definition:Managing general agent (MGA) | managing general agent]] acting under [[Definition:Delegated underwriting authority (DUA) | delegated authority]], and local regulations often dictate specific content requirements, including tax breakdowns and regulatory levy disclosures.

💡 Although it may appear to be a mundane piece of back-office paperwork, the debit note plays an outsized role in [[Definition:Premium accounting | premium accounting]] accuracy and [[Definition:Cash flow | cash flow]] management. Delays or errors in debit note issuance can disrupt the premium settlement cycle, creating discrepancies between what the broker holds in [[Definition:Trust fund | trust]] and what the insurer expects to receive — a matter that regulators in multiple jurisdictions monitor closely. The shift toward digital placement platforms and straight-through processing has modernized debit note workflows considerably, with electronic messaging standards replacing paper documents in many markets. Despite this automation, the underlying function remains unchanged: the debit note is the authoritative demand for payment that sets the premium collection process in motion.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Credit note]]
* [[Definition:Premium accounting]]
* [[Definition:Placing slip]]
* [[Definition:Signing]]
* [[Definition:Broker settlement]]
* [[Definition:Bordereaux]]
{{Div col end}}

Definition:Debit note - Revision history

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