CHAPTER 1

INTRODUCTIONAudit Report

Definition:An audit report is a written opinion of an auditor regarding an entity's financial statements. The report is written in a standard format, as mandated by generally accepted auditing standards (GAAS). GAAS requires or allows certain variations in the report, depending upon the circumstances of the audit work that the auditor engaged in. The following report variations may be used: A clean opinion, if the financial statements are a fair representation of an entity's financial position. Aqualified opinion, if there were anyscope limitationsthat were imposed upon the auditor's work. An adverse opinion, if the financial statements were materially misstated. A disclaimer of opinion, which can be triggered by several situations. For example, the auditor may not be independent, or there is a going concern issue with the auditee.The typical audit report contains three paragraphs, which cover the following topics:1. The responsibilities of the auditor and the management of the entity.2. The scope of the audit.3. The auditor's opinion of the entity's financial statements.An audit report is issued to a user of an entity's financial statements. The user may rely upon the report as evidence that a knowledgeable third party has investigated and rendered an opinion on the financial statements. An audit report that contains a clean opinion is required by many lenders before they will loan funds to a business. It is also necessary for a publicly-held entity to attach the relevant audit report to its financial statements before filing them with the Securities and Exchange Commission.

SCHEDULE C AUDITORS REPORT OF GENERAL INSURANCE COMPANIES

The report of the auditors on the financial statements of every insurer shall deal with the matters specified herein: 1. The auditor shall comment on: a. That they have obtained all the information and explanations which, to the best of their knowledge and belief were necessary for the purposes of their audit and whether they have found them satisfactory; b. Whether proper books of account have been maintained by the insurer so far as appears from an examination of those books; c. Whether proper returns, audited or unaudited, from branches and other offices have been received and whether they were adequate for the purpose of audit; d. Whether the Balance sheet, Revenue account , Profit and Loss account and the Receipts and Payments Account dealt with by the report are in agreement with the books of account and returns; e. Whether the actuarial valuation of liabilities is duly certified by the appointed actuary including to the effect that the assumptions for such valuation are in accordance with the guidelines and norms, if any, issued by the Authority, and/or the Actuarial Society of India in concurrence with the Authority. 2. The auditors shall express their opinion on: (a) Whether the following gives true and fair view: (i) Whether the balance sheet gives a true and fair view of the insurers affairs as at the end of the financial year/period; (ii) Whether the revenue account gives a true and fair view of the surplus or the deficit for the financial year/period; (iii)Whether the profit and loss account gives a true and fair view of the profit or loss for the financial year/period; (iv) Whether the receipts and payments account gives a true and fair view of the receipts and payments for the financial year/period; (b) The financial statements stated at (a) above are prepared in accordance with the requirements of the Insurance Act, 1938 (4 of 1938), the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) and the Companies Act, 1956 (1 of 1956), to the extent applicable and in the manner so required. (c) Investments have been valued in accordance with the provisions of the Act and these Regulations. (d) The accounting policies selected by the insurer are appropriate and are in compliance with the applicable accounting standards and with the accounting principles, as prescribed in these Regulations or any order or direction issued by the Authority in this behalf. 3. The auditors shall further certify that: a) they have reviewed the management report and there is no apparent mistake or material inconsistencies with the financial statements; b) the insurer has complied with the terms and conditions of the registration stipulated by the Authority. 4. A certificate signed by the auditors [which shall be in addition to any other certificate or report which is required by law to be given with respect to the balance sheet] certifying that: (a) they have verified the cash balances and the securities relating to the insurers loans, reversions and life interests (in the case of life insurers) and investments; (b) to what extent, if any, they have verified the investments and transactions relating to any trusts undertaken by the insurer as trustee; and (c) no part of the assets of the policyholders funds has been directly or indirectly applied in contravention of the provisions of the Insurance Act, 1938 (4 of 1938) relating to the application and investments of the policyholders funds. Note: CARO is Not Applicable to Insurance Companies

CHAPTER 2PROFILE OF NEW INDIA ASSURANCE

The New India Assurance Co. Ltd., based inMumbai, is one of the five Wholly Government of India ownedassurance companies of India.It is the "largest generalinsurancecompany ofIndiaon the basis of gross premium collection inclusive of foreign operations". .It was founded by Sir Dorabji Tata in 1919, and was nationalised in 1973.Previously it was a subsidiary of theGeneral Insurance Corporation of India(GIC). But when GIC became anre-insurancecompany as per theIRDAAct 1999, its four primary insurance subsidiariesNew India Assurance,United India Insurance, Oriental Insurance andNational Insurancegot autonomy.New India Assurance operates both in India and foreign countries. In the recent past it has collaborated with some of the leading public sector banks of India such asState Bank of India,Central Bank of India,Corporation Bankand United Western Bankto increase its distribution network.

OfficesThe company with its corporate office in Mumbai has about 31 regional offices, 5 Large Corporate Offices, 412 Divisional Offices, 583 Branches, 27 Direct Agent Branches and 1041 Micro Offices.Centralised claim processing offices called claims hubs are operated from 29 locations.The company operates in 27 Countries as of 2014-15, with 19 Branch Offices in 9 Countries, 7 Agency Offices in 6 countries, and 3 Subsidiary Companies in 7.

Business PerformanceThe only direct insurer in India rated A-(Excellent Stable outlook) by AM Best. "CRISIL has reaffirmed its ' AAA/STABLE ' rating on The New India Assurance Company Limited indicating that the company has the Highest degree of Financial strength to honor its Policyholders obligations".Gross premium ( in India) of Rs.13209 Cr.in the year 2014-15 as against Rs. 11540 Cr. in the year 2013-14. Assets Rs.61720 Cr. as on 31 March 2014. First Indian non-life company to reach Rs. 16050 Cr. gross premium.The domestic gross premium procured for the period from April 2013 to March 2014 was Rs.11,540 crore with a growth of 15.00%, when compared to the same corresponding period pertaining to previous financial year and the globalgross premium stood at Rs.14,304 croreswith a growth of 14.40% over previous year. The company posted PAT (Profit After Tax) of Rs.1089 crores. The company paid a dividend of Rs.220 crores to the Government of India for the fiscal 13-14. Dividend paid to Government of India.The state owned company's achievements include;1) Procurement of highest Global Gross Premium of Rs.16,050 crores for the year 2014-2015. Maintaining the 'largest general Insurer in India' tag.2) Market leadership position for four consecutive decades3) The ratio of available solvency margin to required solvency margin standing at 250%4) Highest net profit of Rs.1431 crores5) Highest net worth of Rs.8,621 crores6) Highest assets - crossed Rs.61720 crores7) Only Indian General Insurance Company to have presence in 27 countries8) Financial Strength rating of A-Excellent (Stable) by A.M Best -Europe.

IT Solution

The company has teamed up withTCS BaNCSto provide a core insurance platform. The project is known as CWISS or Centralised Web based Insurance System Solution.For re-insurance, company uses RAMS software. RAMS stands for Re-insurance accounting and management system. This software is also developed by TCS BaNCS.AwardsNew India Assurance was selected as the General Insurance Company of the year in the 6th Fintelekt India Insurance Awards at a ceremony held at Lalit Sahar, at Mumbai on 26 June 2015. "THE BEST GENERAL INSURANCE COMPANY " consecutively for the third time in 6th Dalal Street Investment Journal PSU Award at Delhi.Director & General Manager, Mr. K. Sanath Kumar received the award from Shri. K. D. Tripathi, Secretary, Ministry of Public Enterprises, Government of India on 23 March 2015 along with Mr. Narinder Kumar, DGM, Mr. S. Bharija, CRM & Mr. J. Mehndiratta, CRM. New India Assurance has emerged as Indias Best General insurance Company for MSMEs, from a Nationwide Survey & Analysis of Small & Medium Enterprises, in 2013-14 conducted by India SME Forum. New India Assurance Co Ltd has received three awards at the 4th Indian Insurance Awards organized by Fintelekt at a grand function held at Mumbai on 25 June 2014. 1)Personal Lines Growth Leader 2)Underserved Market Penetration 3)Technology Maturity New India has received the Platinum Award for Excellence in General Insurance at the 36th SKOCH Summit on 21 June 2014 at Delhi NIA has been selected for Prestigious Indira Gandhi RajBhasha Puraskar for outstanding performance in implementation of our Official language.Hindi.J.D PowerAsia Pacific part ofMcGraw Hill Companieshas ranked New India Assurance Company Ltd, the highest in satisfying auto insurance customers.The award relates to 2011 India Auto Insurance Customer Satisfaction Index Study wherein out of a 1000-point scale, the company scored 804

CHAPTER 3AUDIT OF THE NEW INDIA ASSURANCE

Internal Audit is an independent appraisal function within the organisation for review of systems and the quality of performance as a service to the organization. It objectively examines, evaluates and reports on the adequacy of internal control as a contribution to the proper, economic, effective and efficient use of resources and guards against leakage of revenue.

OBJECTIVES AND SCOPE :The main features of internal audit set up in The New India Assurance Company Ltd, would be as under :-a). Objective :Internal audit-cum-inspection is not to be regarded as an extraneous activity, concerned with criticism and fault-finding. It is an integral part of the Companys function and its objective is to help the management by providing feedback on all the areas of the Companys operations, so that action can be taken if any thing goes wrong and changes in procedure and methods can be introduced, if found necessary, in order to tone up administration and improve efficiency.

b). Functions :The main functions of the Internal Audit-cum-Inspection Department may be summarized as follows :- Review whether the accounting, financial, budgetary and operating control are adequate and have been efficiently applied. Examine whether receipts of the Company on account of premium or otherwise have been correctly assessed and realized as per prescribed tariffs, rules, regulations and orders; whether they have been correctly accounted and promptly deposited in Banks; whether all sums of money paid into the banks in cash or by cheques / drafts have been credited to the Companys accounts; and whether there is effective follow-up for recovery of arrears. Examine whether payments by way of claims, commission and other expenses have been made with due regularity and propriety after proper sanction accorded by a competent authority and have been duly vouched, correctly classified and recorded in accounts; Ensure that the Companys assets are properly accounted and safeguarded from the losses of all kinds, and that there is a periodical physical verification to check the accuracy of the quantity balances in the books; Examine whether instructions and procedures given in the Companys manuals and Head Office Circulars ( including rules, regulations, guidelines etc., issued by the Company ) are strictly followed; Examine whether financial and administrative powers exercised by officials are strictly in accordance with the delegations or guidelines laid down from time to time. Examine whether returns / statements / reports required to be furnished by each office /department to different authorities are correctly complied and sent within the stipulated time.NB : All Offices are required to maintain a calendar of returns showing the returns required to be submitted to different authorities, the due dates and the actual dates of their submission.

The Calendar should be submitted every month for inspection by the Head of the office /department. These apply to the departments in Head Office as well. Test the accuracy of accounting and other data developed in the Office / Department inspected. Examine the delay in issue of documents and settlement of claims. Spot out missing links, if any in the chain of operations which may give room for financial irregularities, misappropriations, frauds etc. Review the register of complaints to see that all complaints have been disposed off within a reasonable time and the machinery set up for the purpose is adequate and efficient.Since a complete check of all transactions, records and documents is physically impossible, the Internal Audit-cum-Inspection Department may exercise a test check of the relevant transactions, records & documents to the extent prescribed for the purpose of a reasonably efficient discharge of above functions.In addition to routine inspection and audit, the Internal Audit-cum-Inspection Department may also carry out in depth review of particular aspects of the working of any office where any serious case of defalcation or breakdown in procedures has been noticed, needing special investigation from the audit angle. Such special reviews may not be undertaken as substitute for vigilance investigations and may be undertaken only under specific orders issued by the Financial Advisor in consultation with the Chairman-cum-Managing Director orvice versa. It should not be open to any lower authorities to divert the Audit Inspection teams for other items of work.

The Audit may also respond to any reference made by the operating office / department on any specific file or query by way of considered opinions / clarification.

c). Methods :The Successful performance of the functions enlisted in sub para (b) call for experience, sound knowledge of procedures, a flair for details and probing nature. The Inspectors and Internal Auditors will, however, be greatly assisted in their tasks if the Company has procedural manuals covering all its departments and all aspects of work. For, in that case, the Audit-cum-Inspection department can prepare a detailed checklist or questionnaire with the help of which the Inspection and Audit teams can cover the whole range of operations in a systematic manner, within the shortest possible time. As a first step, the company should therefore prepare a complete set of procedure manuals. Existing manuals should be revised and brought upto-date and new manuals prepared where non-existent.

However, as Internal Audit-cum-Inspection cannot wait till all the manuals are completed, the Inspectors and Auditors in the mean time will have to carry on with their work on the basis of improvised questionnaire drawn up on the basis of their own experience. Nevertheless, the Internal Audit-cum-Inspection Department should prepare a set of questionnaire or check lists for the use of their Audit and Inspection teams, so that the work may be carried out in a thorough and systematic manner.

At the same time, Auditors and Inspectors should be properly briefed. Their task is not merely to complete the questionnaires or check lists. They should probe into the answers given for each questions, find out the reasons for recurring irregularities, omissions, mistakes and delays and wherever possible give their own suggestions for remedial action.d). Staffing :-The number and composition of the Audit and Inspection teams required may be assessedon the basis of the functions indicated. The teams may be located at Regional Offices, sothat the traveling time may be saved to some extent.The Personnel for audit teams may be drawn from personnel with accounts experience.Inspection teams may consist of personnel with Administrative and technical backgroundand experience in underwriting and claims departments.

e). Frequency of Inspection :-Each Office ( including all the departments at the Head Office and Regional Offices ) should be inspected once during the year. The audit and inspection work pertaining to the HO maybe entrusted to team located at Regional Offices where the HO is situated.

f). Administrative Procedure :-Two copies of each Inspection / Internal Audit report should be prepared and sent by the Audit team to the Competent Authority through proper channel. The HO scrutinizes the report and thereafter forwards one copy of the report to the Officer-in-charge of the office inspected and take followup action. Compliance with the requirements of the Internal Audit and Inspection report should be insisted upon within a reasonable time. Serious irregularities, pointed out in the report should not be followed up in a routinemanner.These should be taken up separately through demi-official letter addressed to the Officer-in-charge of the offices concerned.

g). Verification by Sampling :-i). Audit :As it will not be practicable to verify each and every entry, resort will have to be made to sampling in selecting the items for scrutiny. Either of the following methods may be followed : Select for scrutiny every 3rd payment in a category. If a smaller sample is required,every 4th or 5th payment can be selected. The period can also be selected on a regular basis.E.g. All transaction of the first 10 days in a month can be covered. Select all cases of transactions above, say Rs. 1000/-. A variation of this will be to select systematically a certain number of cases in each layer ( eg. case in the layer Rs. 500/- to Rs. 1,000/-; 10 cases in the layer Rs. 1,000/- to Rs. 2,000/- and so on. )ii). Inspection team should similarly select sample case of files relating to Underwriting,Claims, Reinsurance etc., and thoroughly scrutinize those files. They should then list out the irregularities, omissions, mistakes, delays etc., and report on these. The above methods of sampling are only mentioned by way of an illustration. Teams may use their own ingenuity in selecting the samples.

h). Scope of Audit :-Since internal audit is an integral part of the organization, management would like to know as to whether business is conducted as per laid down rules, procedures, systemsinstructions etc. Internal Audit Department is a link between higher management and field formations at various operative levels by its review of the extent to which objectives and plans have been achieved. The scope of internal audit should, therefore, be unrestricted in the coverage of organisations operations.

It is also the objective of Management to see that irregularities, frauds, misappropriations or non-compliance of its instructions are minimised and corrective measures are undertaken to ensure that adequate control machinery exists. Besides getting individual irregularities rectified, Internal Audit should also suggest remedial measures to prevent recurrence of such irregularities. The basic purpose of Internal Audit is not just to collect instances of irregularities, but to suggest improvements in systems and procedures with a view to minimize, if not altogether eliminate chances of repetition of irregularities, and to present a balanced feed-back report on the working of the office inspected for appropriate correctiveaction by the management.Thus the efficiency of Internal Audit Department would not be measured only from the number of irregularities it has detected or volume of reports submitted but by increase in operational effectiveness and the efficiency and economy achieved by the management due to the application of various remedial measures suggested by the Internal Audit department.

i). Audit sub committee of the Board of Directors :-Board of Directors of the Company have appointed a sub-committee to review major audit objections and their compliance on quarterly basis and therefore audit offices must ensure that the audit objections are given due priority for compliance.

FINANCIAL AUDITIn this, all the financial transactions of a Divisional / Branch Office are scrutinised. Financial transactions normally include :-a) Premium Collection, depositing and accountingb) Refund of premiumc) Commission Payment and accountingd) Claims Payment and accountinge) Expenses of Management

a). Premium1. Collection and depositing of premium by Collective Cashier :-The Collective Cashier receives premium and issues a receipt after allotting a collection number. He prepares Cash Income Book ( form No. RA-16 ) which is used for depositing the collections. The points to be checked are as under :-1. All the documents should be underwritten in system and no premium should be deposited in the bank without booking of document.2. Collection receipts should be issued for all the documents underwritten.3. The cancelled receipts should be kept separately duly certified by Class 1 officer.4. The days collections are deposited in the Collection Account with the Bank on the same day / next working day.5. The cheques of Development Officers, agents and third parties ( not having insurable interest ) are not accepted.6. A register showing acknowledgement of the Sub-Staff for cash / cheques / DDs handed over to him for depositing & subsequently to be checked by the person responsible for positing.7. Whether there is delay in remitting the premium to the Collective Cashier by theDevelopment Officers.

2. Bank Guarantee Accounts :-1. To verify that this facility is extended only to Fire Schedule Policies where premium is not ascertainable in advance and Marine Hull Policies.2. To verify the Bank Guarantee to ascertain its adequacy and validity and that it is on a requisite stamp paper in the approved form.3. To check whether the BG dues are collected in time debits raised in a month should be collected before the close of succeeding month.4. The debits to BG a/c should be checked with the Premium register and the creditswith the Collective Cashier Cash Income Book.5. To verify whether the total of debits to BG a/c do not exceed the Bank Guarantee limit.6. Whether BG has been invoked where client fails to pay the balance in time.

3. Cash Deposit Account :-1. All the points enumerated under Bank Guarantee Account are applicable here also except point nos. (2) & (6).2. For all other classes of business ( e.g. Marine Transits ) Advance Premium a/c. is to be maintained. This is to be operated as per the guidelines contained in HOCircular TECHAGM:10:91, date 03.09.1991.3. To ensure that not more than one APD A/c is opened in the name of the same insured.4. Non-operative APD A/c must be closed before expiry of next financial year with duly discharged vouchers from account holders.4. Co-insurance :-A). Inward ( where we are not leaders ) ( A/c codes 5111, 5113 & 5114 ) :-Premium / refunds are booked on the basis of statements of account / policy copies / letter advices received from leader company. Each office is required to maintain a coinsurance register with various details.This should be checked to see :-1. Whether sharing of business is as per insureds instructions.2. Whether refunds / claims pertaining to other policies are adjusted at the time of settlement of our account. If so, verify JE as well as booking of refunds / claims.3. Enquire into cases where premium is outstanding.4. Whether provision is made in the final accounts of Branch / DO for the share ofclaims payable to the leader on both paid and outstanding claims.

B). Outward ( where we are leaders ) ( A/c. Codes 5101, 5103 & 5104 )1. Arrangements for sharing is to be checked. It is to be seen whether adjustments are correctly made on account of refunds / claims while settling accounts and that the control codes for accounting coinsurance business are correctly used.2. To check whether only our share is booked under Premium / Refund / claims and share of other companies is accounted in Co-insurance control account codes in Premium Register / Refund Premium Register / Disbursement Vouchers.3. Enquire into cases where claims / refunds are outstanding.4. Co-sharing arrangements within the offices of New India should not be accounted as co-insurance arrangement. 100% premium is to be accounted by the Policy issuing office only.

C). Refund of Premium :-1. To verify whether refunds have been properly allowed and sanctioned as per Financial authority.2. To verify the commission recoveries on refunds and to comment on the unrecovered commission.3. In respect of Declaration policies to check whether all the declarations are received when the premium is refunded.4. To check whether large refunds are intentionally kept pending in the last quarter and passed in he month of April to inflate premium figures as well to give benefit to Development Officers for the purpose of Incentives.5. To check whether the refund voucher is discharged by all the parties.6. To check premium refund account schedule as if large refunds are appearing as unpaid for more than 6 months the reasons for the same may be recorded.

D). Commission :-1. To check whether agency license / brokers license is in force and if the license has expired whether commission / brokerage has been released. If so to ask for written explanation from the Office Incharge.2. Whether Payment of commission is sanctioned by competent authority that is Office Incharge.3. Whether TDS has been deducted and deposited in Bank within 7 days of payment.4. Whether there is proper follow-up in cases where commission recoverable is outstanding for more than 3 months.5. Whether Commission / Brokerage expiry register has been generated.

E). Claims Disbursement :-The various aspects to be seen are as under :-1. The signature of insured has been obtained on discharge voucher bearing revenuestamps as per the law.2. In case of policies where banks / financiers interest is involved, whether signature of both insured / bankers of financiers were obtained on the discharge voucher and claim cheque prepared in the name of bank or financier unless letter from bank / financier is obtained slowing payment directly to the insured.3. Claims settling limits prescribed for various cadres of officers are strictly adheredto.4. Whether disbursement vouchers give all required details and vouchers are in serial order.5. That claim cheques are dispatched by ECS to the address of the insured given inpolicy.6. Whether payment of claims are made by Account payee cheques only.7. In case of co-insurance claims, where we are leaders and full amount is paid to the insured, only our share of claim is debited to claims code and share of the coinsurance is debited to co-insurers account code.8. Where fresh cheques are issued by canceling previous cheques, whether correct account codes are used.9. Legal fees relating to claims and any other specific expenses incurred have beendebited to claims account.10. In the case of claims settled on behalf of other offices as well as claims settled by other offices on behalf of the auditee office, control account codes 5553 & 5554are to be used.11. Receipts pertaining to salvage disposal should be credited to claims account.12. In case of TPA the amount stated in the TPA float Account of trial balance tallieswith the Bank Guarantee submitted by TPA.13. In MACT cases where interest payment to individual beneficiary exceeds Rs.50,000/- than TDS @ 20% in the absence of PAN and 10% where PAN is available is deducted or not.F). Expenses of Management :-

GENERAL :-All items other than claims and commission fall under this head which normally include salaries and other allowances to staff, imprest accounts, traveling expenses, motor vehicle expenses, telephone expenses, conveyance, printing & stationery, rent,electricity, office upkeep and maintenance, repairs and renewals, capital expenditurelike purchase of furniture, office equipment and real estate and all other miscellaneous expenses.

Disbursement vouchers are prepared at the time of effecting payments. Scrutiny of these vouchers constitutes important part in financial audit. While scrutinizing, it should be ensured that financial powers are exercised as per the provisions and limits laid down in the standing order on Financial Authority, Powers & Limits. All deviations should be reported.All the supporting bills, vouchers, cash memos, receipts, invoices, etc. should beaffixed with PAID stamp giving date and disbursement number at the time ofmaking payment.

BUDGET & BUDGETORY CONTROL :-1) Whether budget proposals have been prepared on a realistic basis and sent by DOin time to RO.2) The approved budget should be compared with the actual expenses incurred. If there are variances, reasons for the same should be obtained and commented upon.3) Financial powers delegated to various authorities are subject to availability of budget. Therefore, it is to be seen that Budget availability position certificate is indicated on each disbursement voucher to ensure availability of budget be for incurring expenditure. For this purpose, rules stipulate maintenance of register.

IMPREST ACCOUNTS :-Imprests are of following types :-1. Petty Cash2. Postage3. Revenue Stamp4. Policy Stamp &5. Agency Stamp.

The general points to be seen in their audit are :-I. Imprest balance is within sanctioned limit.II. Payment vouchers in case of petty cash are attached.III. Conduct a surprise check of physical balance and tally with book balance.Difference, if any, is to be enquired into.

IV. In case of policy stamps it should be seen that :-a. The stamps immediately on purchase are defaced.b. Separate policy stamp register is maintained.c. Stamps have not been requisitioned when there was sufficient balance with thedepartments.d. Check up from original policies ready for dispatch that stamps are correctlyaffixed.e. Whether stamps are affixed as per the law, the provisions of which are asprevailing.

SALARIES & OTHER ALLOWANCES TO EMPLOYEES :-Points for verification are as under :-1. Whether salary is paid as per salary sheet.2. Whether payments other than normal salary viz. overtime, personal allowance, functionalallowance, leave encashment etc, are properly authorized and paid.3. Whether advances to staff are made as per rules and whether proper control records aremaintained for various advances given to employees and postings for deductions made.4. Whether deductions i.e. income-tax, PF, professional tax, CTD, deductions under courtorder etc. have been correctly made and deposited with the concerned authorities withinthe specified time limit.5. In case of transferred employees, whether details have been fully received from previousoffices and whether advances / loans, income-tax deductions etc. are accounted for.6. Whether confirmations pertaining to declarations of investments by employees forobtaining IT relief are verified.7. Verify JEs passed by Salary Section / Accounts department.

TRAVELLING EXPENSES :-1. Whether tour has been sanctioned in advance by the competent authority.2. The traveling advances have been properly authorized and earlier advances have been cleared. The advance drawn should be reasonable considering the number of days of tour and cost of tickets.3. The traveling bills are supported by hotel bills / receipts, boarding pass, in case of air travel and are sanctioned by the competent authority.4. The mode of journey, halting allowance, hotel room charges, conveyance charges,incidental charges etc. have been claimed as per T.E. Rules.5. The TE bills have been submitted within one month of completion of tour and the bills submitted thereafter are approved by Regional Manager. Balance of advance is refunded to the company immediately.6. The traveling advances and traveling expenses have been properly accounted through adjustment columns of Disbursement voucher or Income Receipts, as the case may be.7. In case of transfer TE bills, the benefits are allowed as per the rules.8. Halting allowance in case of training or attending conference is allowed as per TE rules / circulars and that traveling expenses incurred for traveling for attending conferences are not debited to conference expense.9. Advances pending for more that 3 months have to be reported as CMD level query.

MOTOR VEHCILE EXPENSES :-1. In case of leave proper deductions should be done from monthly entitlement as per rules.2. Insurance, taxes, petrol / diesel, tyres and tubes and batteries are debited to MotorVehicle Expenses Account.3. Reimbursement of petrol / diesel, tyres and tubes, batteries is made only to entitlecategory.4. Disbursement vouchers are supported by bills and cash receipts.5. When new car is sanctioned it should be ensured that the sanction is as per rules and in no case higher valued vehicle is purchased and if the old car is sanctioned under Conveyance Scheme 2002 which comes in effect from 01.01.2003 the written down value of the old car along with proportionate one time tax recovery and proportionate Insurance premium is recovered as per Conveyance Scheme 2011.6. If the old car is sanctioned as per 80:20 scheme then the depreciation allowance should be stopped as soon as the loan gets exhausted.

TELEPHONE / TELEX / FAX EXPENSES :-Points for verification are as under :-1. For entitled officers quarterly reimbursement is to be checked for landline and mobile telephones.2. For officers who have been allotted telephone at residence in Discretionary quota the reimbursement /payment of telephone bills is within prescribed limit of Rent plus local calls allowed.3. In case Company owned Telephone is provided to the Officer whether the same is surrendered back to the company on retirement, death, resignation.

RENT ( BOTH OFFICE & RESIDENTIAL ACCOMMODATION )Points for verification are as under :-1. Whether hiring of premises is approved by HO, authority in terms of Area, Rate, Period, Advance etc. Whether renewal terms are approved by HO. In the case of leasing of office premises, the tender procedure followed may be checked.2. Whether payments are made as per agreement and are accounted.3. Whether adjustment of advance / recovery of interest is made before payment.4. Whether there is any litigation. If so, enquire into details.5. Whether Rent register is maintained.6. Whether the premises rented is not excessive in area and is properly utilized.7. Whether premises are occupied within reasonable time of taking possession and paying Advance / Deposit.8. Whether Income tax is deducted from rent paid where the annual payment isRs. 1,20,000/- or more per landlord.

Additional points in case of residential accommodation :-A) Owned premises :- Verify the following.1. Whether register is maintained showing the occupancy and recoveries of License fee and that they are not idle for long periods.2. Whether municipal taxes and other statutory payments are regularly made.3. Whether inventory of assets is maintained.4. Leave & License Agreement is entered into.5. If leased to outsiders, reasons thereof may be reviewed.6. Whether register for repairs to premises is maintained.7. Electricity and water charges are to be borne by the occupants.

B) Leased premises :- Verify the following.1. Register of leased premises showing occupancy and recoveries of license fees ismaintained.2. Where the leased premises are in the name of individual employee, reimbursement is made on production of rent receipt as per norms.3.Whether leased premises are taken although company owned premises are available.If so, enquire into reasons for the same.4. No furniture should be provided. Fixtures like fans, geyser are provided as per norms.5. Water & Electricity charges are to be borne by the employees.6. In case of leased accommodation provided to the officer it should be checkedwhether HRA has been stopped and license fee is recovered from the Officer.7. Whether TDS has been deducted from the rent and deposited in the Bank withinprescribed time limit.8. Where the monthly rent is more than officers entitlement and company is paying full rent, then whether the deduction of difference is made from salary of concernedofficer or not.

PRINTING & STATIONERY :The following points should be covered :-1. The DO / BO should not incur expenses for printing of letter heads, envelopes, continuation sheets and all numbered stationery which are to be printed at RO only.2. Whether there are any obsolete stocks. If so, reasons must be enquired into.3. Sample checking of stocks should be done.4. Whether the printing is done as per norms laid down and they are within the budget.5. Whether the payments are sanctioned as per financial authority. In some cases the bills of the same order are split into lower amounts and sanctioned by junior officers. Such cases should be immediately brought to the notice of higher management.

REPAIRS & MAINTENANCE :-Verify :-1. All recurring expenses on a particular item / asset.2. Is there annual maintenance contract entered into after inviting quotations / rates etc. In the case of annual maintenance contracts for computers, whether the terms are as per requirements and guidelines.3. Whether expenses are debited to correct account code and are economical keeping in view the life of the asset.4. In case of major repairs whether approval from competent authority is obtained.5. Whether income-tax is deducted from payments to contractors as per provision under Income Tax Act.

CONVEYANCE :-1. Local conveyance register should be scrutinized.2. Conveyance and out of pocket expenses for attending Lok Adalats etc. are paid as per the HO guidelines.

BOOKS & PERIODICALS :Expenditure on these should be verified with reference to :-1. Approval for newspapers and magazines purchased.2. Register maintained for purchase of books.3. Whether old newspapers / magazines are properly disposed off and sales proceeds are accounted.4. A physical check of the books in the library may be conducted. Whether the Librarian has conducted physical check periodically and whether cost of books that are found missing have been recovered / written off may be checked.

RURAL INSURANCE EXPENSES :-Verify that :-1. Tags are purchased from approved suppliers and supplies received are entered in the stock register.2. Whether the stock register gives particulars of tags issued such as quantity and serial number and to whom it is issued. Seriality of tags is maintained.3. Fees paid to veterinary doctors are as per the rates prescribed from time to time and are verified with the policy documents.4. Expenses incurred in connection with the participation in exhibition etc are as per the sanction of competent authority and expenses are accounted properly.5. Physical checking of stock in hand.MISCELLANEOUS EXPENSES :-Verify whether the expenses debited to this account do not pertain to any other account head.CAPITAL EXPENSES :-Verify :-1. Whether the assets are purchased after approval by competent authority.2. Whether expenses are within approved budget.

SATUTORY PAYMENTS :-Verify :-1. Whether income tax deducted at source from salaries, commission, rent and payments tocontractors, surveyors, Advocates is remitted to the Authorities within the stipulated timelimits.2. Whether Sales Tax collected on the disposal of salvage is remitted in time and return isfiled with the Sales Tax Authorities.3. Any penalty / fine imposed by any authority for violation of any statute should beinvariably reported.4. Whether Quarterly/Annual returns are filed with the tax authorities in time. There may becases of inordinate delay in filing e-TDS returns which can attract heavy penalties.

NUMBERED STATIONERY CONTROL INCLUDING COVERNOTE CONTROL :-Points to be seen are :-1. Whether all the numbered stationery like cover notes are entered in the register soon after receipt and preserved properly.2. Strict control is exercised by DO / Branch on cover notes issued to the Development Officers by maintaining cover note control register. Check whether all cover notes issued to inspectors are either accounted or returned for cancellation. Check missing or unaccounted cover notes in depth. All provisions of HO circular dated 09.01.1991, issued by the CMD should be strictly observed. Documents taken over from Development Officers who have retired, resigned or deceased are to be listed & cancelled to prevent their misuse.3. In case of cancellation of cover notes to check 1. The reason of cancellation 2. Date of cancellation 3. Date of deposit of cancelled cover note in the office 4. Whether all the 4copies are deposited. 5. Whether control number for receipt of cancelled cover notes ismaintained or not.4. Whether HO / RO instructions regarding control over cover notes and other numbered stationery are followed. All deviations should be reported.5. Whether all the numbered stationery are kept under lock and key.6. Physical verification of some of the items should be done by the visiting audit teams.7. Obsolete stationery should be destroyed to prevent their misuse.

SERVICE TAX :-1. Whether service tax is collected properly. Whether total amount collected is intimated to RO in time as per the instructions of Central Accounts Department, HO after deducting service tax on refunds made.2. In case of co-insurance, the leader should alone collect the full amount of service tax.3. Whether the office is taking Input Credit of Service Tax correctly and intimating the same to higher office properly.

CHEQUE DISHONOURED BOOK :-Verify to ensure that :-1. All cheque dishonoured to be booked through system immediately on receipt from bank.2. In the case of cancellation of Motor Policy arising out of dishonour of cheque, whether the RTO is informed promptly by Registered Post AD. Also Bank / financer is to be informed.3. Whether cancellation endorsements are sent to the insured promptly.4. Commission paid is recovered where policy is cancelled.5. Where there are frequent instances of dishonour of cheques under any Development Officer code, reasons for the same should be looked into by the audit party. Suitable observations should be made in the audit report.6. Cases where there are repeated cases of cheque dishonour pertaining to one insured or where third party cheques / Agents cheques / development Officers cheques are dishonoured, a Xerox copy of such cheque may be taken as a supporting evidence to audit query / investigation.7. Whether there are instances of dishonour of cheques not reported to the DO / Branch, but revealed at the time of bank reconciliation. In all such cases, reasons for the same should be looked into and also the aspect of who collected the dishonoured cheque advice from the bank should be seen.8. Whether there are any claims registered on policies in respect of which premiumcheques have been dishonoured. This could be done on a test check basis.9. All Audit Incharges should review the cheque dishonoured statements received and take prompt action wherever warranted.10. Bank charges on cheque dishonour to be recovered from concerned Agent / Development Officer.

BANKING :-Points for verification are as under :-1. Presently only two accounts viz. Collection account and Disbursement account are to beoperated by a DO / Branch.2. Due to introduction of new banking system- Zero balance accounts, the idle funds lyingin old collection/disbursement accounts are transferred or not. Whether initiative forcloser of old accounts is taken or not.3. Whether bank statements are received regularly.4. Whether bank reconciliation is done regularly on monthly basis.5. Whether prompt follow-up action is taken on items outstanding in reconciliationparticularly Code-2, Code-5 and Code 6 items.6. Whether funds are transferred as per the standing instructions viz. on every Saturday from the Branch collection a/c. to the DO Collection a/c. and on every Saturday from the DO Collection a/c. to Head Office.7. Whether the DO is sending to RO on weekly basis, the details of transfers to HO such as the date, TT No., amount and book balance after transfer. Similarly, the DO has to send statement for transfers received from HO.8. In all cases of delayed transfers, penal interest should be calculated @12% per annum and reported. Similarly, penal interest should be calculated even where the banks have not transferred entire balance unless it is justified because the bank is giving immediate credit and the balance not transferred represents the uncleared portion.9. Surplus funds lying in the Disbursement accounts should also be transferred to Collection account.10. Whether the bank charges levied on transfers are as per the IBA regulations in force.11. All the JEs passed to clear the items in bank reconciliation are to be checked. It should also be verified whether all items pending in bank reconciliation particularly for stale cheques ( to be taken from Code-1), Bank charges ( Code-3 ), cheques dishonoured( Code-6) are accounted by suitable JEs atleast at the time of closing of accounts. Audit to point out only if they are not cleared at the year end while reviewing the latest audited Trial Balance.

BANK RECONCILIATION :-Bank Reconciliation is to be done on monthly basis and if the same is not done reasons for the same may be recorded.While checking Bank Reconciliation following codes should be checked in details :-1. Code 1 Cheques issued but not debited by the Bank :-Many times claims cheques are prepared but the same are not sent to the client, whichresults in cheque appearing as outstanding. Such cases should be examined in detail and the reasons for the same should be ascertained.2. Code - 2 Cheque deposited but not credited :-If items are outstanding for more than 6 months the cheques become stale and the amount will never be credited. If any claim is registered and paid on such policy Section 64 VB confirmation should be checked in order to find the officer who has signed the same. Such matters should be brought to the notice of higher management immediately.3. Code 6 Cheques dishonoured but not accounted in our books :-If such cases are found the same should be immediately reported because in case of TP claim there will be no defence available with the company and the claim will have to be paid even though the cheque has been dishonoured.4. Code 8 Cheques debited by Bank but not accounted in our Books :-This is also a very serious matter because in some cases there may be cases of forgery where our account will be debited even though we might have issued a cheque for smaller amount. Further in some cases TP awards, which become ex-party, may be debited to our Account.

JOURNAL VOUCHERS :-Introduction :-JEs are prepared for rectification of errors viz. errors of omission or commission or principle.Closing JEs are passed to account depreciation, outstanding claims, outstanding expenses, accrued income, prepaid expenses, money-in-transit, etc. All the JEs are to be authorized by the Accountant and the Officer Incharge.The following types of JEs need full attention :-1) JEs passed for booking of premium, claims, cheque dishonoured and refunds are to be checked and their impact ( due to inflating / suppression of premium / claims etc ) on performance appraisal of the office or a Development Officer are to be studied and to be reported.When business is shared by two or more offices of New India, 100% premium is to be accounted by the policy issuing offices only. If any JE is passed by offices other than policy issuing office, the same should be commented upon.2) All expenses booked through JEs are to be supported by proper bills / vouchers in which case all rules for verifying a disbursement voucher are applicable here also.3) Any unauthorised writing off any advance / debit balance is to be reported.4) In the case of transfer of employees, whether suitable JEs are passed in respect ofvarious loans and advances to staff.

FINAL ACCOUNTS GENERAL LEDGER, TRIAL BALANCE WITH SCHEDULES :-1) Postings from various income / outgo books, journals may be traced for the monthsselected.2) Verification of brought forward / carried forward of closing / opening balances is to be done on a test check basis.3) Scrutiny of schedules are to be undertaken, items pending for a long time appearing under various advances codes / Suspense a/c. and control codes are to be examined and commented upon.4) Items which are basically revenue in nature but appearing in the Schedule ( e.g.incentives paid / leave encashment not adjusted appearing as Advance Salary ) are to be looked into.5) To check whether the schedules are drawn wherever required showing opening balance, additions, deductions and closing balance instead of just showing closing balance only.e.g. vehicle loan schedule.6) Whether action has been taken on previous years report of statutory auditors and items appearing in schedules and notes forming part of audited trail balance. ( indicate corrective measures taken to avoid repetition ).7) Whether the accounted figures as appearing in the audited trial balance agree with the statistics appearing in various statistical returns. If the differences are material, reasons are to be looked into and are to be reported if there are no valid reasons.

PERSONNEL DEPARTMENT :-General :-1) Whether attendance is properly marked.2) Whether half day CL is debited for each and every occasion of late arrival / early going occurring after three late comings / early goings in a calendar month.3) Whether accrued leave is calculated properly and entered in the leave records. Noprivilege leave accrues for the period when the employee is on PL, SL, LWP, unauthorised absence and under suspension.4) Whether leave applications are received from employees for the leave availed as per the Attendance register and are posted to leave records properly.

5) In the case of Leave Without Pay ( LWP ), the aspects to be seen are :-Whether competent authority has sanctioned it, whether timely and correct advices are sent to Salary section, whether recovery is actually made by the Salary section, whether increment is postponed in cases where LWP exceeds 30 days in a year, whether GIC has been advised where the LWP exceeds 180 days and whether suitable disciplinary action under CDA rules is taken wherever warranted.In case of LWP, to ensure that salary is not generated for unauthorized absence and all statutory deductions are also withheld in case of unauthorisedly absent employee.6) In the case of promotions, whether fixation is done properly.7) In the case of transfers, whether personnel record ( including leave record ) is alsotransferred giving details of eligibility regarding LTS, leave encashment, brief case,mediclaim and domiciliary treatment.8) In case of transfer of vehicle in the name of officer under the New Conveyance Scheme the WDV to be checked whether calculated according to given norms applicable only for vehicles under Conveyance Scheme 2002. In case of vehicles transferred to Conveyance Scheme 2011, the WDV to be added to income and tax to be deducted.9) In case of recommendations for settlement of terminal dues, the basic pay, payrecoverable in case of exit taking place during the month, leave encashment components, various benefits available as per options.10) Whether various staff benefits such as Leave encashment, LTS / Foreign LTS, brief case etc. are allowed as per rules.11) Overtime, if any, should be approved by the Competent authority at HO.12) In cases where disciplinary action is in the form of stoppage / deferment of increments, whether it is implemented correctly. In the case of Development Officers, the fact of such disciplinary action is to be recorded in the Performance Appraisal sheet for control purposes.13) Ceilings as per the applicable scales of pay for each cadre are to be kept in mind at the time of checking of stagnation increments. Rules governing stagnation increments are to be strictly observed.14) Proper enrolment forms are obtained for coverage under staff mediclaim. Premium recovery is to be checked. Test check of a few claims paid is to be made to ascertain whether the same are settled as per rules.15) In the case of employees kept under suspension, whether the subsistence allowance was paid correctly and on revocation of suspension, whether relevant rules regarding pay and allowances, deductions and leave are observed.

HOUSING LOAN :-1) Whether there are any cases where housing loan was given and the employee continues occupation of Companys Quarters even after completion of construction of his own premises.2) Whether loan is sanctioned by competent authority.3) Whether agreement is executed as per approved terms.4) Whether the loan is secured as per the provisions of Housing Loan Scheme.5) Whether the property is adequately insured and kept renewed.6) Whether loan & interest recoveries are regularly effected as per rules and the advices are acted upon by the salary section.7) Whether documents are preserved in safe custody.8) Whether recovery has started immediately for supplementary loan.9) Whether the quantum of supplementary loan is sanctioned as per rules.

VEHICLE LOAN :-1). Approved make :-The vehicle purchased should be of approved make. Even if the employee is willing to bear the difference in cost between the approved make and any higher model, it cannot be allowed.2). Hypothecation agreement is submitted and the endorsement is made in the RC book.3). In the case of non-entitled employees, interest is recovered and shown under separate code in the salary sheet.SPECIAL POINTS PECULIAR TO VARIOUS CLASSES OF EMPLOYEES :-1) When an Officer is converted from Development side to Administration, non-core benefits and entertainment allowance are withdrawn.2) In case of promotion from Development Officer to AO(D) only fixed conveyanceallowance is payable until confirmation. Petrol expenses reimbursement will beapplicable only from the date of confirmation.3) In the case of officers availing leased accommodation / company-owned accommodation, whether license fee is deducted as per norms.4) Where an employee is promoted from Class III to Class I, qualification pay is to bewithdrawn.5) When change of assignment takes place, functional allowance is withdrawn (e.g.) Audit Officer, Vigilance Officer, Cash handling allowance, etc.CLASS II CELL :-1) Non-core allowance ( e.g. conveyance allowance ) are released as per scheduledpremium income ( SPI ). Arising out of audit, if SPI is revised, suitable change in thequantum of non-core allowance is to be made.2) In the case of Development Officers with excess cost, cost control and decrementprocedure are to be observed as per the scheme.3) INCENTIVE AUDIT :-The aspects to be seen are :-a. To check the arithmetical accuracy of incentive calculation sheet as well as theworking sheet for arriving at the data on premium, claims, commission and cost ofindividual Development Officer.b. Agreement of accounted premium of the branch with the Development Officer wise premium.

c. Transfer of business from direct code / Development Officers code to another are to be examined from the point of view of GIC circular dated 14.11.1992.d. Whether relevant items appearing under Inter Office codes ( 5553 / 5554 ) are considered.e. Whether various JEs passed for accounting refunds, claims, coinsurance arrangements, premium booking etc are considered.f. In the case of policies with co-sharing arrangements or where the business is sharedbetween different codes within the same office or master policy credits, whether therespective share of claims also is considered.4. Arising out of audit, if any Development Officer becomes ineligible for a car loan, then interest @12% p.a. is chargeable on the loan amount till he becomes eligible. In addition, conveyance allowance is payable on no car basis till he becomes eligible.

CLASS III & IV :-1. Various functional allowances are released correctly and withdrawn at the time oftransfers / promotions / change of duties.2. Whether any inapplicable allowances are released.3. Qualification pay is released as per rules and withdrawn on promotion to Class I

GRIEVANCE CELL :-Grievance cases register is to be checked. Correctness of number of cases pending and new cases reported, cases settled during the period under audit may be test checked. The reasons for pending cases, especially cases which are pending for more than six months may also be test checked to see how far the action taken on the grievance was prompt. Bad cases of delay before the case was taken up by the cell may be highlighted after ascertaining the systems failure and remedial action taken in such cases. Comments to be given on the lapses which had resulted in grievances.

CUSTOMER SERVICE :-Points for verification are as under :-1. Instances of abnormal overcharging of premium along with reasons such as non-receipt of circulars / instructions, lack of knowledge of tariff.2. Commission allowed in lieu of special discount is to be recovered from the agents and refunded to the insured.3. In certain claims, penalty is levied for non-observance of warranties, some of which could have been avoided by timely risk inspection and proper risk management advices.4. Inordinate delay in submission of survey reports, in issuance of documents, settlement of claims and in granting of genuine refunds.5. Review of grievance cell cases ascertaining the lapse which had resulted in grievances and the remedial action taken.

AUDITORS' REPORT To The Members' The New India Assurance Company Limited Report on the Financial Statements:

We have audited the accompanying financial statements of The New India Assurance Company Limited (the st Company), which comprise the Balance Sheet as at 31 March, 2014 and the annexed the revenue accounts of Fire, Marine and Miscellaneous Insurance Business (collectively known as 'Revenue Accounts'), Profit and Loss Account and Receipts and Payments Account of the Company for the year then ended and a summary of significant accounting policies and other explanatory information. Incorporated in these financial statements are: (a) Returns from Thirty Two Regional Offices(including 4 LCO's), Four Hundred and Twelve Divisional Offices audited by the other firms of Auditors appointed by the Central Government ; (b) Returns from Nine Foreign Branches audited by local Auditors appointed by the Company ; (c) Returns from Seven Foreign Agencies audited by local Auditors appointed by the Company; and (d) Returns of Eight Unaudited and One Audited run-off Foreign Agencies (In all covering total premium of 13727.61 crores and Incurred Claims of 10428.25 crores) Management's Responsibility for the Financial Statements: Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Insurance Act 1938, the Accounting Principles as prescribed in the Insurance Regulatory and Development Authority ('IRDA') (Preparation of financial Statements and Auditors' Report of Insurance Companies) Regulations, 2002 and orders or direction issued by the Insurance Regulatory and Development Authority and accounting principles generally accepted in India, including the Accounting Standards ` ` notified under the Companies Act, 1956 read with General Circular 15/2013 dated 13 September 2013, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility : Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgments, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Emphasis of Matter: Without qualifying our opinion, attention is invited to Notes to Accounts: a. Note number 8(a), 8(b) (ii) and 8(c) in Schedule 16 B regarding non-compliance of Insurance Regulatory and Development Authority (IRDA) Regulations during the year. b. Note number 12 in Schedule 16 B, which describe deferment of gratuity liability of the company to the extent of Rs. 3431.20 lakhs, pursuant to the circular dated 18-04-2011 of IRDA to Public sector insurance companies. c. Note number 8 (b) (i) in Schedule 16 B, non-disclosure of segment reporting in respect of Public and Product Liability of Foreign Business.

CHAPTERSUGGESTIONS AND CONCLUSIONS

SUGGESTIONS:

In the areas of access control and business continuity plan, the Companies should evolve suitable security policies with clearly defined procedures and responsibilities. Its implementation by the operating offices should be closely monitored by Head Office. Directions, instruction and guidelines issued by IRDA, TAC and the Head Offices of the Companies should be incorporated into the system. Necessary modifications to the software may be made in respect of the deficiencies relating to input controls, application controls and process controls pointed out in Audit.

CONCLUSIONNew India Assurance Company Limited (NIA) is engaged in non-life insurance business (Fire, Marine and Miscellaneous Insurance). Assessment, collection of premium, issue of policies and settlement of claims were critical to their business. These operations were being conducted through Genisys. Deficiencies in access control, input control and business continuity planning made the system vulnerable to manipulations, errors and nonconforming to the relevant provisions of rules and regulations. The design deficiencies led to incorrect provisioning of claims and interest apart from contributing to non-integration of the data among all operating offices leading to manual interventions in data entry. Genisys was being used by the three insurance companies but continued with the deficiencies brought out above.

BIBLIOGRAPHY

www.newindia.co.in/downloads/Complete_Final_Book_2014.pdfwww.accountingtools.com/definition-audit-reporten.wikipedia.org/wiki/New_India_Assurance

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