IC46 General Insurance Account Preparation and Investment Rules – Study Tips
This article gives information of subjects for candidates appearing for the Insurance Institute of India’s Associateship (Non-Life) exam. This exam is mostly about financial accounting and investment rules.
This subject is meant to give information to candidates who want to work in the non-life or general insurance business accounting, an overview of the business’s accounting, methods, techniques, and process. IC 46 also includes important things to learn about, like investment accounting and regulations, IFRS aspects, and Internal Audit processes and techniques.
Companies Act 1956, the Insurance Act 1938, and guidelines and directives from the Insurance Regulatory and Development Authority of India all need to be followed when insurance accounting is done.
Let’s look at why General Insurance Accounting is important and what it does.
Importance of General Insurance Accounting:
Accounting in a regular way helps insurance companies communicate their financial results to a wide range of people, including policyholders, through financial statements.
Insurance companies have to show financial statements in their annual report, which is required by the Insurance Act and IRDAI rules.
Accounting: The following are some of the things that accounting does:
1.) Performance is analized.
3.) Accounting data is used to make decisions.
4.) Comparison of trends.
5.) Compliance with government rules and taxes.
Importance of Accounting standards, Concepts & Principles of Accounting are important topics for people who are appearing for exam
So let’s figure out what “Accounting Principles” are. You can use this as a guide when you choose which accounting procedures to use. It is based on a set of rules called “generally accepted accounting principles” (GAAP). GAAP are rules for how to make financial statements.
IRDAI rules say that these financial statements for general insurance companies should be made as follows
1.) The Balance Sheet is what you see when you look at
2.) The Revenue Account.
3.) Accounts for Profit and Loss.
The cash flow statement shows how much money is coming in and going
It’s important for students and candidates who are taking the IC 46 exam to know and be able to apply the important rules of accounting, the different types of accounting, and control and depreciation accounting.
Revenue account & underwriting results:
Insurance companies look at their revenue and underwriting results as the main thing to think about. Revenue account is used to figure out Underwriting results and revenue account surplus after the investment income on the policyholders’ fund is taken into account.
IC 46 also talks about insurance accounting rules, which say that Insurance Companies that do business in insurance must follow the rules.
Candidates who want to take IC 46 should also know about the legal aspects of financial accounting. General Insurance companies get help with legal things like accounting and auditing from;
1.) The Companies Act, 1956, is what you need to know about.
2.) All about insurance: The Insurance Act of 1938 and the rules for insurance in 1939.
3.) IRDA Act, 1999.
I4.) RDA rules about accounts.
Reinsurance accounting is the main thing that IC 46 talks about, and candidates for the exam need to know a lot about this. Reinsurance accounting deals with more than just the financial aspects of reinsurance. It also deals with technical and legal aspects of reinsurance, too.
This is how reinsurance accounting works and how it works for different types of insurance, reinsurance types, types of reinsurance, types of reinsurance arrangements, and other things that make up a treaty. Candidates who want to work in reinsurance should know the basics of many types of treaties, like Quota Share, Surplus Treaties, and Excess of Loss Treaties, and how they affect reinsurance accounts.
Investment accounting, Statutory Audit, and Internal Audit in the General Insurance Business are some of the other important topics covered in IC 46, as well.