23 November 2011
Can anybody tell me what points should keep in mind while making audit of Insurance Company (Division Audit). How to vouch Premium, claims etc..
24 November 2011
First of ally analyse the types of insurance undertaken like Fire, Marine, Accident, Medical etc. Record the company's SOP and prepare an audit programme for each insurance type, by identifying key risk areas.
Premium : Premiums are generally received in advance. So see revenue recognition and see proper accounting is done for prereceived premiums. Claims : See the claims lodged with the company. Go through the claim docket files and cases. You may be able to analyse the amount of claim admissible. See if the required provision is made for claims lodger but not paid. See claims settled during the audit period and see whether any shortcomings appear (like excess payment), paymnet not in accordance with statutory rules like Motor Accident death etc. See third party claims and settlement in accordance with terms of policy. You can vouch for expenses normally and see if the required provision is made. Look for statutory dues compliance. See terms of co-insurance and their settlement and disbursement. Interest payment on delayed claims is another area that may be looked into, and proper provisioning if not settled yet. Related party transactions may be looked into and their reporting.
Insurance companies have a reporting compliance. See if the reporting requirements have been complied with and in a proper manner.
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