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Accounting for Insurance syllabus

ACS 20710 units · 54 topicsAcademic year 2083/84
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Accounting for Insurance

10 units

1. Introduction (3 LHs)

  1. Concept of insurance, Types of Insurance
    1. Concept of insurance, Types of Insurance: life insurance, general insurance, reinsurance and micro insurance
  2. Regulatory body (Nepal Insurance Authority)
    1. Regulatory body (Nepal Insurance Authority)
  3. Evolution of insurance industry, development of insurance industry in Nepal
    1. Evolution of insurance industry, development of insurance industry in Nepal
  4. Meaning, nature, objectives, importance and functions of insurance
    1. Meaning, nature, objectives, importance and functions of insurance
  5. Opportunities and challenges of Insurance Sector in Nepal
    1. Opportunities and challenges of Insurance Sector in Nepal

2. Nepal Insurance Authority (3 LHs)

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

3. Product Design and Development (8 LHs)

  1. Designing of life insurance products
    1. 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
  2. Approval procedures, role of actuary
    1. Approval procedures, role of actuary
  3. Marketing strategies
    1. Marketing strategies, Agency management, Appointment procedures of surveyors. Agent commission and surveyors fee and accounting treatment thereon.

4. Basic Accounting Concepts (4 LHs)

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

5. Non-Life Insurance Business (6 LHs)

  1. Terms and techniques used in insurance
    1. Terms and techniques used in insurance
  2. Their computation and accounting
    1. their computation and accounting: Underwriting results
    2. premium register
    3. written premium
    4. earned premium
    5. unearned premium
    6. gross premium
    7. net premium
    8. co-insurance
  3. Reserving in general insurance
    1. reserving in general insurance
    2. technical reserves
  4. Unexpired risk reserves
    1. unexpired risk reserves
    2. claim register
  5. Claim and claim handling costs
    1. claim and claim handling costs
    2. intimated claim
    3. gross claim
    4. claim recovery
    5. net claim
    6. outstanding claim
    7. incurred claim
  6. Incurred but not reported claim
    1. incurred but not reported claim
  7. Reinsurance premium ceded and accepted
    1. reinsurance premium ceded and accepted
    2. acquisition cost
  8. Deferred acquisition cost
    1. deferred acquisition cost
  9. Net commission agent commission
    1. net commission agent commission
  10. Reinsurance commission and profit commission service charge
    1. reinsurance commission and profit commission service charge(regulation fee) to Insurance Authority allocation of management expense
  11. Investment and other income
    1. investment and other income
  12. Catastrophic premium etc
    1. catastrophic premium etc.

6. Life Insurance Business (6 LHs)

  1. Terms and techniques used in life their computation and accounting
    1. Terms and techniques used in life their computation and accounting: Life Insurance fund
    2. policy register
  2. Types of premium from determination perspective
    1. Types of premium from determination perspective: Gross premium vs. Net premium
  3. Office premium/level premium
    1. office premium/level premium
  4. Types of premium from accounting perspective
    1. Types of premium from accounting perspective: First premium
    2. renewal premium
    3. first year premium
    4. single premium
  5. Collection of deposit and advance premium
    1. collection of deposit and advance premium
  6. Agents commission and incentive commission
    1. agents commission and incentive commission
  7. Medical examination fee
    1. medical examination fee
  8. Concept of claim procedures
    1. Concept of claim procedures
    2. claim register
  9. Accounting for claim
    1. Accounting for claim: Maturity claim
  10. Partial maturity claim
    1. partial maturity claim
    2. surrender claim
    3. death claim
    4. paid up value
    5. annuity payments
    6. netting of claims
  11. Bonus paid to policyholder
    1. Bonus paid to policyholder
  12. Tax treatment as final withholding tax
    1. tax treatment as final withholding tax
  13. Accounting for claim receivable from Reinsurance and claim paid to other insurance company
    1. 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
  14. Allocation of management expense
    1. allocation of management expense
  15. Investment and other income
    1. investment and other income
  16. Catastrophic premium etc
    1. catastrophic premium etc.
  17. Service charge (regulation fee) to Insurance Authority
    1. service charge (regulation fee) to Insurance Authority
  18. Reserving in life insurance
    1. reserving in life insurance.

7. Accounting for Reinsurance (5 LHs)

  1. Concept and importance
    1. Concept and importance
  2. Various types of reinsurance arrangements
    1. 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.

8. Internal Control mechanism (3 LHs)

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

9. Preparation of Financial Statements (6 LHs)

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

10. Financial Statements Analysis (4 LHs)

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