Important Questions for ACCOUNTS OF INSURANCE COMPANY

Question 1. Prepare revenue account and profit and loss account for life

insurance company with following information’s:

Premium income Rs 2,00,000

Interest, dividend, rent( policy holder) 40,000

Interest dividend, rent (shareholders) 35,000

Operating expense Rs 70,000

Commission Rs 28,000

Benefit paid Rs 80,000

Opening balance of valuer’s liability Rs 26,000

Closing balance of valuer’sliability Rs 29,000

Question 2. Prepare revenue account and profit and loss account for life

insurance Company with following information’s:

Premium Rs. 8,00,000

Annuity paid Rs. 1,20,000

Surrender Rs. 80,000

Claim paid Rs. 75,000

Consideration for annuity Rs. 2,40,000

Expenses of management Rs. 1,50,000

Interest, dividend, rent (policy holder) Rs. 70,000

Interest, dividend, rent (shareholder) Rs. 60,000

Opening balance of valuer’s liability Rs. 90,000

Closing balance of valuer’s liability Rs. 1,12,000

Income tax (shareholder) Rs. 40,000

Interim bonus paid Rs. 24,000

Reversionary bonus Rs. 28,000

NOTE: Bonus to policy holders can be paid in three way: Bonus in cash

Bonus in reduction of premium Reversionary bonus ( payable at maturity)

Note: Interim bonus means ………………………………….

Question:3 Prepare Valuation Balance Sheet and show distribution

statement:

Life Assurance Fund as on 31-03-2017 Rs.1900

Lacs Net Liability as per Valuation Rs. 1 ,500

Lacs Interim Bonus paid Rs.250 lacs

Question:4 The Life fund of a Life Assurance Company was Rs.90,00,000 as

on 31st March, 2017. The interim bonus paid during the inter valuation

period was Rs.4,00,000. The periodical actuarial valuation determined the

net liability at Rs.74,00,000. Surplus brought forward from the previous

valuation was Rs.5,00,000. The directors of the company proposed to carry

forward Rs. 10,00,000. Show:

(a) The valuation Balance Sheet,

(b) The net profit for the valuation period; and

(c) The distribution of the surplus.

Question:5 A Life Assurance Co. got its valuation made once in every two

years. The life assurance fund on, 31s1 March, 2012 amounted to

Rs.51,52,000. Its actuarial valuation on 31st March, 2012 disclosed net

liability of Rs. 50,00,000 under the Assurance and annuity contracts. An

interim bonus of Rs. 40,000 was paid to the policy holders during the inter

valuation period ending 31st March, 2012. Surplus brought forward from

the previous valuation was Rs.35,000.

(a) The valuation Balance Sheet

(b) The profit for the valuation period; and

(c) The distribution of the surplus.

Question 6:( Life Assurance Fund). The revenue account of a life insurance

company shows the life assurance fund on 31st march, 2015 at Rs.

62,21,310 before taking into account the following items:

i Claims recovered under re-insurance Rs. 12,000.

ii Bonus utilized in reduction of life insurance premium Rs. 4,500

iii Interest accrued on securities Rs. 8,260

iv Outstanding premium Rs. 5,410

v Claims intimated but not admitted Rs. 26,500

What is the life assurance fund after taking into account the above

omissions?

(C.S. Inter. June 1993.