FCS Deepak Pratap Singh
Quick Summary
As you are aware that an Insurance Company is a company incorporated under provisions of the Companies Act, 1956/2013, licensed under the Insurance Act, 1938 and IRDAI Act,1999. An insurance company may engage in life , general or health insurance business. The financial statements of an insurance c
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FAQ :
The financial statements of an insurance company are prepared according to the Companies Act, 2013, the Insurance Laws (Amendment) Act, 2015, the IRDAI (Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations, 2002, and applicable Accounting Standards of ICAI.
The auditor verifies that premium collections are credited to a separate bank account, transferred as per company policy, and that no risk is assumed without premium receipt, as per Section 64VB of the Insurance Act, 1938. They check the chronological maintenance of premium registers, reconciliation with the General Ledger, and proper accounting of installments and refunds.
During claims verification, auditors check the provision for unsettled claims to ensure it reflects legal liability and does not exceed the insured amount. They also review co-insurance arrangements, the classification and accounting of claims-related expenses, and the completeness of the liability account.
Insurance audits apply to all types of insurance contracts, including property insurance, liability insurance, business interruption, life insurance, health insurance, employee benefit plans, pension insurance, and vehicle insurance.
The auditor checks if reserves for unexpired risks have been created correctly, representing the portion of premium attributable to succeeding accounting periods. They also verify that unearned premium received in advance is disclosed separately as a current liability.
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