- 1 Marks
AAA – Nov 2012 – L3 – SA – Q7 – Audit of Specialized Industries
Identifying non-relevant procedures in the audit of a life insurance company.
Question
In the audit of an insurance company carrying out life business, which of the following is NOT relevant?
A. Providing a general reserve which shall be equal to net liabilities on policies in force at the time of actuarial valuation and an additional amount equal to 25% of net premium for every year between actuarial valuation dates.
B. Providing a contingency reserve equal to 1% of gross premium or 10% of profit whichever is greater and which is accumulated until it attains the amount of minimum paid up capital.
C. Providing a margin of solvency which shall not be less than 15% of the gross premium received, less re-insurance premium paid or 15% of the paid-up capital whichever is higher.
D. Separation of funds into Individual Life, Group Life, Health Insurance etc., showing each class.
E. Profit determination only by actuarial valuation of the liabilities and comparing this with available assets.
Find Related Questions by Tags, levels, etc.
- Tags: Actuarial Valuation, Insurance Reserves, Life Insurance Audit, Solvency
- Level: Level 3
- Topic: Audit of Specialized Industries
- Series: NOV 2012