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Unearned Premium

Unearned Premium (UEP or UP)

Definition

Unearned Premium (UEP or UP) — 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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