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 Insurance
II) General Insurance
a) Fire insurance
b) Marine insurance
c) 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
sche
dule
Particulars
Premiums earned net
(a) Premium
(b) Re-insurance ceded
(c) Re-insurance accepted
Income from investments
(a) Interest, Dividends
and
Rent Gross
(b) Profit on sale / redemption
of Investments
(c) (Loss on sale / redemption
of Investments)
(d) Transfer
/ Gain
on
revaluation /change in fair
value*
Other Income (to be specified)
Total (A)
Commission
Operating Expenses related to
Insurance Business
Provision for doubtful debts
Bad debts written off
Provision for tax
Current
Year
(RS000)
Previous
Year
(Rs000)
Provision (other than taxation)
(a) For diminution in the value of
investment (Net)
(b) Other (to be specified)
Total (B)
Benefits Paid (Net)
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
Transfer to Shareholders
Accounts
Transfer to other Reserves (to be
specified)
Balance being Funds for
Future appropriations
Total (D)
FROM A-PL
Profit and Loss Account for the year ended 31st March, 20.
Particular
s
Amounts transferred from /to
the Policyholders Account
(Technical account)
Income from investments
(a) Interest, dividends And
Rent Gross
(b) Profit on sale /redemption
of Investments
(c) (Loss on sale/ redemption
on Investments)
Other income (to be specified)
Total (A)
Expenses other than Those
directly related to the insurece
business
Bal debts written off
Provisions
(other
Than
taxation)
(a) For diminution in the value
of investments (Net)
(b) Provisions
for Doubtful
debts
(c) Others (to be specified)
Total (B)
Profit / (Loss) before tax
Provision for Taxation
Profit / (Loss) after tax
Appropriations
(a) Balance at the Beginning
of the year
(b) Interim dividends
Paid
during the year
(c) Proposed final dividend
(d) Dividend distribution on tax
Sche
Current
Previous
dule
Year
(RS000)
Year
(Rs000)
FORM A-BS
Balance Sheet as at 31st March, 20
sche
dule
Particulars
SOURCES OF FUNDS
Shareholders Funds:
Share Capital
Reserves and Surplus
Credit / [Debit] Fair Value
Change Account
Sub total
Borrowings
Policyholders Funds:
Credit/
[Debit] Fair
Change Account
Value
Policy Liabilities
Insurance Reserves
Provision for Linked Liabilities
Sub Total
Funds
Appropriations
For
Future
Total
APPLICATION OF FUNDS
Investments
Shareholders
Policyholders
8a
Current
Year
(RS000)
Previous
Year
(Rs000)
Assets
Liabilities
Held to Cover Linked
8b
Loans
Fixed Assets
10
Current Assets
Cash and Bank Balances
11
Advances and other Assets
12
Sub total
(A)
Current Liabilities
13
Provisions
14
Sub total
(B)
Net Current Assets (C) = (A)(B)
Miscellaneous Expenditure (to
the extent not written off or
adjusted)
15
Debit balance in profit and loss
account
(Shareholders
Account)
Total
CONTINGENT LIABILITIES
Particulars
1. Partly paid-up investments
Current
Year
(RS000)
Previous
Year
(Rs000)
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
Current
Previous
Year
Year
(RS000)
(Rs000)
Particulars
1. First year premiums
2. Renewal premiums
3. Single premiums
Net Premium
Total Premiums
SCHEDULE 2
Commission Expenses
Particulars
Commission paid
Direct First year premiums
Renewal premiums
Single premiums
Add: Commission on Re-insurance Accepted
Current
Year
Previous
Year
(RS000)
(Rs000)
Less: Commission on Re-insurance Ceded
Net commission
SCHEDULE 3
Operating Expenses Related to Insurance Business
Particulars
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
Current
Year
Previous
Year
(RS000)
(Rs000)
12. Interest and Bank Changes
13. Others (to be specified)
14. Depreciation
Total
SCHEDULE 4
Benefits Paid (Net)
Current
Year
Particulars
(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
.
Previous
Year
(Rs000)
172
SCHEDULE 5
Share Capital
Particulars
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
Current
Year
Previous
Year
(RS000)
(Rs000)
SCHEDULE 6
Reserves and Surplus
Particulars
Current
Year
(RS000)
Previous
Year
(Rs000)
Current
Year
(RS000)
Previous
Year
(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
Particulars
1. Debentures / Bonds
2. Banks
3. Financial Institutions
4. Others (to be specified)
Total
.
SCHEDULE 8
Investments Shareholders
Current
Year
(RS000)
Particulars
LONG TERM
INVESTMENTS
1. Government
securities
and
Government
guaranteed
bonds
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. Investments in infrastructure and
Social Sector
5. Other than approved investments
SHORT TERM
INVESTMENT
1. Government
securities
and
Government guaranteed
bonds
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) Investment properties Real
Estate
4. investments in infrastructure and
social sector
5. Other than approved investments
Total
Previous
Year
(Rs000)
SCHEDULE 8A
Investments Policyholders
Current
Year
(RS000)
Particulars
LONG TERM
INVESTMENTS
1. Government
securities
and
Government
guaranteed
bonds
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) Investment properties Real
Estate
4. Investments in infrastructure and
social sector
5. Other than approved investments
SHORT TERM
INVESTMENT
[Link]
securities
and
Government
guaranteed
bonds
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) Investment properties Real
Estate
4. Investments in infrastructure and
social sector
2. Other than approved investments
Total
Previous
Year
(Rs000)
SCHEDULE 8B
Assets Held to Cover Linked Liabilities
Current
Year
(RS000)
Particulars
LONG TERM
INVESTMENTS
1. Government
securities
and
Government guaranteed
bonds
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) Investment properties Real
Estate
4. Investments in infrastructure and
social sector
5. Other than approved investments
SHORT TERM
INVESTMENT
1.
Government
securities
and
Government
guaranteed
bonds
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) Investment properties
Real
Estate
4. Investments in infrastructure and
social sector
5. Other than approved investments
Total
Previous
Year
(Rs000)
SCHEDULE 9
Loans
Particulars
[Link]-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
[Link]
CLASSIFICATION
a) Loans classified as standard
(aa) in India
(bb) outside India
a) Non-standard
loans
less
provisions
(aa) in India
(bb) outside India
Total
4. MATURITY-WISE CLASSIFICATION
a) short-term
b) long-term
Total
Current
Year
(RS000)
Previous
Year
(Rs000)
SCHEDULE 11
Cash and Bank Balances
Current
Year
(RS000)
Particulars
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
Previous
Year
(Rs000)
181
SCHEDULE 12
Advances and Assets
Current
Year
(RS000)
Particulars
ADVANCES
1.
Reserve
companies
deposits with
ceding
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
insurance
business
(including
reinsures)
6.
Due from subsidiaries / holding
company
Previous
Year
(Rs000)
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
Particulars
Current
Year
Previous
Year
(RS000)
(Rs000)
Current
Year
Previous
Year
(RS000)
(Rs000)
[Link] Balance
[Link] due to other insurance
companies
[Link] held on re-insurance ceded
[Link] received in advance
[Link] premium
[Link] creditors
[Link] to subsidiaries / holding
company
[Link] outstanding
[Link] due
[Link] to officers / directors
[Link] (to b specified)
Total
SCHEDULE 14
Provisions
Particulars
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)
Particulars
[Link] allowed in issue of shares /
debentures
[Link] (to be specified)
Total
Current
Year
Previous
Year
(RS000)
(Rs000)
