Computation of Correct Life Assurance Fund
Format for Statement showing correct Life Assurance
Fund:
|
Particulars |
Amount
(Rs.) |
Amount
(Rs.) |
|
Life assurance fund as ascertained |
xxxxx |
|
|
ADD: Interest
and dividend accrued on investment |
xxxxx |
|
|
Interest accrued on securities |
xxxxx |
|
|
Bonus utilised in induction of premium |
xxxxx |
|
|
Outstanding premium (cument year) |
xxxxx |
|
|
Claims covered under reinsurance (or)
Re-insurance claims recovered |
xxxxx |
|
|
Claims of last year paid during this year |
xxxxx |
|
|
xxxxx |
||
|
Claims written back (old) Re-insurance recoveries |
xxxxx |
xxxxx |
|
xxxxx |
||
|
LESS: Bonus
utilised in redaction of premium |
xxxxx |
|
|
Claims intimated but not admitted (or) claims
intimated but not accepted |
xxxxx |
|
|
Income tax |
xxxxx |
|
|
Provision for tax |
xxxxx |
|
|
Claims outstanding (current year) |
xxxxx |
|
|
Bonus paid in cash |
xxxxx |
|
|
Agents commission to be paid |
xxxxx |
|
|
Premium payable under reinsurance (or)
Re-insurance premium |
xxxxx |
xxxxx |
|
Correct life assurance fund |
xxxxx |
Sum: 1
The
life insurance fund of an insurance company on 31.3.16 showed a balance of Rs
87,76,500. It was found that the following were not taken into account.
- Dividend
from investments Rs 4,80,000
- Income tax on above Rs 48,000
- Bonus
utilized in reduction of premium Rs 8,77,500
- Claims
intimated but not accepted by company Rs 4,23,000
- Claims
intimated but not accepted by company Rs 7,62,000
Ascertain
the correct life assurance fund.
|
Solution |
||
|
Calculation of correct life
assurance fund |
||
|
Particulars |
Amt |
Amt |
|
Life assurance fund as ascertained |
|
87,76,500 |
|
Add : Dividend from investments |
4,80,000 |
|
|
Bonus utilised in reduction of premium |
8,77,500 |
|
|
Claims covered under re-insurance |
4,23,000 |
17,80,500 |
|
|
|
1,05,57,000 |
|
Less : Income tax on above |
48,000 |
|
|
Bonus utilized in reduction of premium |
8,77,500 |
|
|
Claims intimidated but not accepted by company |
7,62,000 |
16,87,500 |
|
Correct life assurance fund |
88,69,500 |
|
Sum:
2
Indian
life Assurance Company gets its valuation made once in every two years. Its
life assurance fund on 31.3.16 stood at Rs.45,65,000 before providing for
Rs.45,000 being the shareholders dividend for 2015-16. Its actuarial valuations
on 31.3.2016 disclosed a net liability of Rs.32,20,000. An interim bonus of
Rs.80,000 was paid to the policy holders during the previous two years. prepare a statement show-ing the amount now
available as bonus to policy- holders.
|
solution |
|||||||||
|
Valuation of Balance Sheet |
|||||||||
|
Particulars |
Amount |
Particulars |
Amount |
||||||
|
To Net liability as per
actuarial valuation |
32,20,000 |
By Life assurance fund as per B/S |
45,65,000 |
||||||
|
To Net Surplus (B/F) |
13,45,000 |
|
|
||||||
|
|
45,65,000 |
|
45,65,000 |
||||||
| ||||||||||||||||||||||||||||||||
Sum:
3
Life
fund of a life assurance company was Rs..86,48,000 as on 31.3.16. The interim
bo-nus paid during the valuation period was Rs.1,48,000. The periodical
actuarial valuation determined the net liability at Rs..74,25,000. Surplus
brought forward from the previous valuation was Rs,8,50,000. The direc-tors of
the company proposed to carry forward Rs,9,31,000 and to divide the balance between the shareholder-ers and
policyholders in the ratio of 1:10. show A) the valuation of Balance sheet; B)the net profit for the valuation period; C) the distribution of the surplus.
|
Solution |
|||||||||||
|
A. Valuations of Balance Sheet |
|||||||||||
|
Particulars |
Amount |
Particulars |
Amount |
||||||||
|
To Net liability as per actuarial valuation |
74,25,000 |
By life assurance fund as per B/s |
86,48,000 |
||||||||
|
To Net Surplus(B/f) |
12,23,000 |
|
|
||||||||
|
|
86,48,000 |
|
86,48,000 |
||||||||
B.
Calculation of Net Profit for the Valuation Period
|
Particulars |
Amount |
|
Surplus as per valuation Balance sheet |
12,23,000 |
|
Add: Interim bonus paid to policy holders |
1,48,000 |
|
Total Surplus |
13,71,000 |
C.
Statement showing Distribution of Surplus
|
Total surplus |
13,71,000 |
|
Bonus amount due to policy holders |
9,31,000 |
|
Actual surplus available to shareholders and
policy holders |
4,40,000 |
|
Surplus distributed to
shareholders(4,40,000×1/11) |
40,000 |
|
Surplus distributed to policy
holders(4,40,000×10/11) |
4,00,000 |
|
Less: Interim
bonus already distributed |
1,48,000 |
|
Surplus due to policy holders |
2,52,000 |
