Insurance Companies

Authoritative documents involved as:

• The Insurance Act
• The Companies Act
• IFRS 4 Insurance Contracts

The major legislation governing insurance companies and their conduct is the Insurance Act

Key audit areas as: For an insurance company these are as:

1. Investments or

2. Unearned premiums,

3. Expired dangers, this is while a category of business has confirmed to be unprofitable provision is made for future losses on risks previously accepted,

4. Outstanding claims,

5. Ascertainment of creditors and debtors,

6. Actuarial valuation re: life insurance.

Insurance companies such as banks are subject also to particular exempting provisions in the Insurance Act and in the Companies Act.  Unlike banks, not only do they take advantage of the special provision however are in fact required through the Commissioner to obtain benefit of the provisions. The auditor therefore, in practice provides two audit reports for an insurance company and is also necessary to sign various reports such are submitted to the Commissioner of Insurance.  The insurance company arranges statutory accounts that are audited in the common way and a fair and true view report provided and these are submitted to the members in the general way and adopted and dividends paid on their strength. The Commissioner after that requires accounts to be prepared in accordance along with insurance regulations taking benefits of creating secret reserves.  Also these are audited and reported on accordingly through the auditor however not in fair and true view terms however rather through simply stating compliance along with the insurance act.