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Unearned Premium

Unearned Premium (UEP or UP)

Definition

That portion of the policy premium that has not yet been "earned" by the company because the policy still has some time to run before expiration. A property or casualty insurer must carry all unearned premiums as a liability in its financial statement since, if the policy should be canceled, the insurer would have to pay back a certain part of the original premium.

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