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.
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