unit -3.docx
TRANSCRIPT
UNIT - III
ACCOUNTS OF INSURANCE COMPANIES
Introduction
The business of Insurance in India is governed by TheInsurance Act, 1938 along with the regulations framed by InsuranceRegulations and Development Authorities Act, 1999 (IRDA)Insurance is an agreement or contract of indemnity betweeninsurer and insured. Insurer is one party agrees to provideprotection against loss or damage in the form of promise to pay forsuch loss to other party known as insured in consideration for afixed sum of money known as premium.
The terms and conditions of such insurance contract in thewritten is called Insurance Policy.
Insurance are of the types I) Life InsuranceII) General Insurancea) Fire insuranceb) Marine insurancec) Miscellaneous insurance
In case of Life Insurance, the insurer guarantees to pay a certain sum of money to the assured on completing a stipulated period or in the event of the death to his legal representative. It covers risks and gives protection for the investment.
Section 2(II) of the Insurance Act, 1938 has defined Life
Insurance Business as the business of effecting. Contracts of insurance upon human life, including any contract whereby the payment of money is assured on death or the happening of any contingency dependent on human life, and any contract which is subject to payment of premiums for a term dependent on human life and shall be deemed to include
a) The granting of disability and double or triple indemnity accident benefits, if so provided in the contract of insurance; b) The granting of annuities upon human life; and
c) The granting of superannuation allowances and annuities payable out of any fund applicable solely to the relief and maintenance of person engaged or who have been engaged in any particular profession, trade or employment or of the dependents of such persons.
FROM A-RA
Revenue Account for the year ended 31st March, 20
scheCurrentPrevious
ParticularsduleYearYear
(RS000)(Rs000)
Premiums earned net
(a) Premium1
(b) Re-insurance ceded
(c) Re-insurance accepted
Income from investments
(a) Interest,Dividendsand
Rent Gross
(b) Profit on sale / redemption
of Investments
(c) (Loss on sale / redemption
of Investments)
(d) Transfer/ Gainon
revaluation /change in fair
value*
Other Income (to be specified)
Total (A)
Commission2
Operating Expenses related to3
Insurance Business
Provision for doubtful debts
Bad debts written off
Provision for tax
Provision (other than taxation)
(a) For diminution in the value of investment (Net) (b) Other (to be specified)
Total (B)
Benefits Paid (Net)4
Interim Bonuses Paid
Change in valuation of liability in respect of life policies(a) Gross**
(b) Amount ceded in Reinsurance
(c) Amount accepted in Reinsurance
Total (c)
Surplus / (Deficit( (D) = (A) - (B) - (C)
Appropriations
Transferto Shareholders
Accounts
Transfer to other Reserves (to be specified)
Balancebeing Funds for
Future appropriations
Total (D)
FROM A-PL
Profit and Loss Account for the year ended 31st March, 20.
ScheCurrentPrevious
ParticularsduleYearYear
(RS000)(Rs000)
Amounts transferred from /to
the Policyholders Account
(Technical account)
Income from investments
(a)Interest,dividendsAnd
Rent Gross
(b) Profit on sale /redemption
of Investments
(c)(Loss on sale/ redemption
on Investments)
Other income (to be specified)
Total (A)
Expenses otherthanThose
directly related to the insurece
business
Bal debts written off
Provisions(otherThan
taxation)
(a)For diminution in the value
of investments (Net)
(b) ProvisionsforDoubtful
debts
(c)Others (to be specified)
Total (B)
Profit / (Loss) before tax
Provision for Taxation
Profit / (Loss) after tax
Appropriations
(a) Balanceat theBeginning
of the year
(b)InterimdividendsPaid
during the year
(c)Proposed final dividend
(d)Dividend distribution on tax
FORM A-BSBalance Sheet as at 31st March, 20
scheCurrentPrevious
ParticularsduleYearYear
(RS000)(Rs000)
SOURCES OF FUNDS
Shareholders Funds:
Share Capital5
Reserves and Surplus6
Credit / [Debit] Fair Value
Change Account
Sub total
Borrowings7
Policyholders Funds:
Credit/[Debit]FairValue
Change Account
Policy Liabilities
Insurance Reserves
Provision for Linked Liabilities
Sub Total
FundsForFuture
Appropriations
Total
APPLICATION OF FUNDS
Investments
Shareholders8
Policyholders8a
AssetsHeld toCoverLinked8b
Liabilities
Loans9
Fixed Assets10
Current Assets
Cash and Bank Balances11
Advances and other Assets12
Sub total
(A)
Current Liabilities13
Provisions14
Sub total
(B)
Net Current Assets (C) = (A)-
(B)
Miscellaneous Expenditure (to15
the extent not written off or
adjusted)
Debit balance in profit and loss
account(Shareholders
Account)
Total
CONTINGENT LIABILITIES
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1. Partly paid-up investments
2. Claims, other than against policies, not
acknowledge as debts by the company
3. Underwriting commitments outstanding (in
respect of shares and securities)
4. Guarantees given by or on behalf of the
company
5. Statutory demands/liabilities in dispute, not
provided for
6. Reinsurance obligations to the extent not
provided for in accounts
7. Others (to be specified)
Total
SCHEDULES FORMING PART OF FINANCIAL STATEMENTS
SCHEDULE 1
Premium
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1.First year premiums
2.Renewal premiums
3.Single premiums
Net Premium
Total Premiums
SCHEDULE 2
Commission Expenses
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
Commission paid
Direct First year premiums
Renewal premiums
Single premiums
Add: Commission on Re-insurance Accepted
Less: Commission on Re-insurance Ceded
Net commission
SCHEDULE 3
Operating Expenses Related to Insurance Business
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1.Employees remuneration and welfare
Benefits
2.Travel, conveyance and vehicle running
Expenses
3.Training expenses
4. Rents, rates and taxes
5.Repairs
6.Printing and stationery
7.Communication expenses
8. legal and professional changes
9.Medical fees
10. Auditors fees, expenses etc.
(a) as auditor
(b) as adviser or in any other capacity, in
respect of
i. taxation matters
ii. insurance matters
iii. management services, and
(c) in any other capacity
11. Advertisement and publicity
12. Interest and Bank Changes
13. Others (to be specified)
14. Depreciation
Total
SCHEDULE 4
Benefits Paid (Net)
CurrentPreviousParticularsYearYear
(RS000)(Rs000)
1. Insurance Claims
(a) Claims by Death
(b) Claims by Maturity
(c) Annuities/ Pension Payments
(d) Other Benefits, specify
2. (Amounts ceded n reinsurance):
(a) Claims by Death
(b) Claims by Maturity
(c) Annuities / Pension Payments
(d) Other Benefits, specify
3. Amount accepted in reinsurance:
(a) Claims by Death
(b) Claims by Maturity
(c) Annuities / Pension Payments
(d) Other Benefits, specify
Total
.
172
SCHEDULE 5
Share Capital
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1.Authorized capital
Equity shares of Rs.. each
2.Issued capital
Equity shares of Rs..each
3.Subscribed capital
Equity shares of Rs..each
4. Called-up capital
Equity shares of Rs.. each
Less: Calls unpaid
Add: Shares forfeited (amount originally paid
up)
Less: Par value of Equity Shares bought back
Less: Preliminary Expenses
Expenses including commission or brokerage
on underwriting or subscription of shares
Total
SCHEDULE 6
Reserves and Surplus
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1.Capital Reserve
2.Capital Redemption Reserve
3.Share Premium
4. Revaluation Reserve
5. General Reserves
Less: Debit balance in profit and
loss account, if any
Less: Account utilized for buyback
6.Catastrophe Reserve
7.Other Reserve (to be specified)
8.Balance of profit in profit and loss
account
Total
SCHEDULE 7
Borrowings
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1.Debentures / Bonds
2.Banks
3.Financial Institutions
4. Others (to be specified)
Total
.
SCHEDULE 8
Investments Shareholders
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
LONG TERM INVESTMENTS
1. Governmentsecuritiesand
Governmentguaranteedbonds
including Treasury Bills
2. Other Approved Securities
3. Other Investments
(a)Shares
(aa) Equity
(bb) Preference
(b)Mutual funds
(c)Derivative instruments
(d)Debentures/ Bonds
(e)Other securities (to be specified)
(f)Subsidiaries investment properties
Real Estate
4.Investmentsin infrastructureand
Social Sector
5. Other than approved investments
SHORT TERM INVESTMENT
1.Governmentsecuritiesand
Governmentguaranteedbonds
including Treasury Bills
2.Other approved securities
3.Other investments
a)Shares
(aa) Equity
(bb) Preference
b)Mutual funds
c)Derivative instruments
d)Debentures/ Bounds
e)Othersecurities(tobe
specified)
f)Subsidiaries
g) Investment properties Real
Estate
4.investmentsin infrastructureand
social sector
5. Other than approved investments
Total
SCHEDULE 8A
Investments Policyholders
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
LONG TERM INVESTMENTS
1. Governmentsecuritiesand
Governmentguaranteedbonds
including Treasury Bills
2. Other Approved Securities
3. Other Investments
a)Shares
(aa) Equity
(bb) Preference
b)Mutual funds
c)Derivative instruments
d)Debentures/ bonds
e)Other securities (to be specified)
f)Subsidiaries
g)InvestmentpropertiesReal
Estate
4. Investments in infrastructure and
social sector
5. Other than approved investments
SHORT TERM INVESTMENT
1.Governmentsecuritiesand
Governmentguaranteedbonds
including Treasury Bills
2. Other approved securities
3. Other investments
a)Shares
(aa) Equity
(bb) Preference
b)Mutual funds
c)Derivative instruments
d)Debentures/ Bonds
e)Other Securities (to be specified)
f)Subsidiaries
g)InvestmentpropertiesReal
Estate
4. Investments in infrastructure and
social sector
2. Other than approved investments
Total
SCHEDULE 8B
Assets Held to Cover Linked Liabilities
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
LONG TERM INVESTMENTS
1. Governmentsecuritiesand
Governmentguaranteedbonds
including Treasury Bills
2. Other Approved Securities
3. Other Investments
(a) Sharesaa) Equity bb)
Preference
(b)Mutual funds
(c)Derivative instruments
(d)Debentures/ bonds
(e)Othersecurities(to be
specified)
(f)Subsidiaries
(g)InvestmentpropertiesReal
Estate
4. Investments in infrastructure and
social sector
5. Other than approved investments
SHORT TERM INVESTMENT
1.Governmentsecuritiesand
Governmentguaranteedbonds
including Treasury Bills
2. Other approved securities
3. Other investments
a) Shares (aa) Equity
(bb) Preference
b) Mutual funds
c)Derivative instruments
d)Debentures/ Bounds
e) Other securities (to be specified)
f) Subsidiaries
g) InvestmentpropertiesReal
Estate
4. Investments in infrastructure and
social sector
5. Other than approved investments
Total
SCHEDULE 9
Loans
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1.SECURITY-WISE CLASSIFICATIONS
Secured
a)On mortgage property
(aa) in India
(bb) outside India
b)Shares, Bonds,Government
securities etc.
c)Loans against policies
d) Others (to be specified)
Unsecured
Total
2. BORROWER-WISE CLASSIFICATION
a) Central and state government
b) Banks and financial institutions
c)Subsidiaries
d)Companies
e)Loans against policies
f) Other (to be specified)
Total
3.PERFORMANCE-WISE
CLASSIFICATION
a) Loans classified as standard
(aa) in India
(bb) outside India
a)Non-standardloansless
provisions
(aa) in India
(bb) outside India
Total
4. MATURITY-WISE CLASSIFICATION
a) short-term
b) long-term
Total
SCHEDULE 11
Cash and Bank Balances
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1. Cash (including cheques, drafts and
stamps)
2. Bank Balance
a)Deposit accounts
(aa) Short term (due within 12
months of the date of balance
sheet)
(bb) Others
b)Current accounts
c) Others (to be specified)
3. Money at call and short notice
a)With banks
b)With other institutions
4. Others (to be specified)
Total
Balance with non-scheduled banks
included in 2 and 3 above
CASH AND BANK BALANCES
1.In India
2.Outside India
Total
181
SCHEDULE 12
Advances and Assets
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
ADVANCES
1.Reservedeposits withceding
companies
2.Application money for investments
3. Prepayments
4. Advances to Directors / officers
5. Advance tax paid taxes deducted at
source (net provision for taxation)
6. Others (to be specified)
Total
(A)
OTHERS ASSETS
1.Income accrued on investments
2.Outstanding Premiums
3. Agents Balance
4.Foreign Agencies Balance
5. Due from other entities carrying on
insurancebusiness(including
reinsures)
6.Due from subsidiaries / holding
company
7.Deposit with Reserve Bank of India
(pursuant to Section 7 of Insurance
Act, 1938)
8.Others (to be specified)
Total
(B)
Total
(A+B)
SCHEDULE 13
Current Liabilities
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1.Agents Balance
2.Balance due to other insurance
companies
3.Deposits held on re-insurance ceded
4.Premium received in advance
5.Unallocated premium
6.Sundry creditors
7.Due to subsidiaries / holding
company
8.Claims outstanding
9.Annuities due
10.Due to officers / directors
11.Others (to b specified)
Total
SCHEDULE 14
Provisions
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1.For taxation (less payments and
taxes deducted at source)
2.For proposed dividends
3.For dividend distribution tax
4.Others (to be specified)
Total
SCHEDULE 15
Miscellaneous Expenditure (To the extent not written off a adjusted)
CurrentPrevious
ParticularsYearYear
(RS000)(Rs000)
1.Discount allowed in issue of shares /
debentures
2.Others (to be specified)
Total