OUTSTANDING PREMIUM

This should normally comprise amounts due for uncollected premium where the company is allowed relaxation to the provisions of Section 64VB of the Insurance Act, 1938. The outstanding balances are expected to be temporarily outstanding and should be recovered within the stipulated period after the year-end. There may however be cases of premium otherwise receivable and due but which remains uncollected at the year-end. (a) Bank guarantee limits available - Premium in respect of risk accepted under Bank Guarantee and Cash Deposit received either directly or through agents is accounted for with reference to the limits available. Normally, monthly statements are prepared and submitted to every party and the balances of outstanding premium are recovered before the close of the following month. Outstanding premium in excess of bank guarantee available should be reported. (b) Cash Deposit - The balance of this account is always credit except in cases where the premium due exceeds the cash deposits resulting in debit balance recoverable from the party. Debit balance in the cash deposit account is shown separately since they are classified separately with the debit balance under outstanding premium on the assets side of the balance sheet.OUTSTANDING PREMIUM