Accounting for Insurance

• Concept of insurance, Types of Insurance: life insurance, general insurance, reinsurance and micro insurance
• Regulatory body (Nepal Insurance Authority)
• Evolution of insurance industry, development of insurance industry in Nepal
• Meaning, nature, objectives, importance and functions of insurance
• Opportunities and challenges of Insurance Sectorin Nepal;

Function, duties and power of the insurance authority, role of insurance authority in development of insurance sector in Nepal; Licensing of insurance business, reinsurance business, agency, brokers and surveyors.

• Designing of life insurance products: Term insurance, term insurance with return of premium, Unit linked insurance plans, Endowment plans, Money back policy, Whole life insurance, Group life insurance, child insurance plans, Retirement plans. Non-life Insurance products: Motor insurance, Health insurance, Marine insurance, Aviation insurance, Engineering insurance, Property insurance, Travel insurance, Miscellaneous insurance, crop and cattle insurance
• Approval procedures, role of actuary
• Marketing strategies, Agency management, Appointment procedures of surveyors. Agent commission and surveyors fee and accounting treatment thereon.

Basic accounting principles, assumptions and conventions, accounting rules and classifications of accounts, procedures, functions and users of accounting; double entry system of book keeping, journal, ledger and trial balance.

Terms and techniques used in insurance, their computation and accounting: Underwriting results, premium register, written premium, earned premium, unearned premium, gross premium, net premium, , co-insurance, reserving in general insurance, technical reserves, unexpired risk reserves, claim register, claim and claim handling costs, intimated claim, gross claim, claim recovery, net claim, outstanding claim, incurred claim, incurred but not reported claim, reinsurance premium ceded and accepted, acquisition cost, deferred acquisition cost, net commission agent commission, reinsurance commission and profit commission service charge(regulation fee) to Insurance Authority allocation of management expense, investment and other income, catastrophic premium etc.,

Terms and techniques used in life their computation and accounting: Life Insurance fund, policy register, Types of premium from determination perspective: Gross premium vs. Net premium, office premium/level premium, Types of premium from accounting perspective: First premium, renewal premium, first year premium, single premium, collection of deposit and advance premium, agents commission and incentive commission, medical examination fee, Concept of claim procedures , claim register, Accounting for claim: Maturity claim , partial maturity claim, surrender claim , death claim, paid up value, annuity payments, netting of claims, Bonus paid to policyholder, tax treatment as final withholding tax, accounting for claim receivable from Reinsurance and claim paid to other insurance company. Accounting treatment of outstanding claim (including IBNR and IBNER). Accounting process for loan against policies, allocation of management expense, investment and other income, catastrophic premium etc., service charge (regulation fee) to Insurance Authority, reserving in life insurance.

Concept and importance; various types of reinsurance arrangements: facultative reinsurance and treaty reinsurance, Advantages and disadvantages of reinsurance, reinsurance regulation in Nepal, Characteristics of reinsurance accounting, reinsurance accounting system, Catastrophic reinsurance, Bordeaux. Accounting treatment of premium ceded and accepted, reinsurance claim receivable and payable and final settlement made thereon, reinsurance commission and profit commission, impact of foreign exchange thereon.

Reconciliation of transactions with banks, reinsurer and other parties; Preparation of bank reconciliation statement for the transaction with bank. Audit committee, Compliance Department, AuthorityInternal Audit , Statutory Audit and Tax Audit.

• Regulations on insurance accounting, concept and importance
• Statement of profit and loss and other comprehensive income (Income statement)
• Statement of Revenue account, Statement of financial position/balance sheet
• Statement of cash flow statement
• Statement of changes in equity, summary of significant accounting policies and notes to account.

• Concepts and importance
• Ratio analysis: concept, importance and limitations
• Different ratio analysis tools (liquidity, solvency, efficiency and profitability) and their interpretation