PROJECT ON INSURANCE AUDIT

Bachelor of Commerce [Banking & Insurance] Semester Vth (2011-2012)

Submitted In partial Fulfillment of the requirements For the award of degree of B.COM---Banking & Insurance By

Name of Student

GURU NANAK COLLEGE Of Arts, Science & Commerce GTB Nagar, Mumbai 400 037

CERTIFICATE
This is to certify that Ms. _________________ of B.com Banking & Insurance Semester Vth (2011-2012) has successfully completed the project on Topic Name Under the guidance of Name of Guide.

Principal

Dr. Raju Chandnani _________________

Course Co-ordinator

Project Guide/Internal Examiner ______________

External Examiner __________

DECLARATION

I Name of Student the Student of B.com Banking & Insurance Semester Vth (2011-2012) hereby declared that I have completed the project on topic name

The Information Submitted is True & Original to the Best of my knowledge.

Signature of Student

Name of the Student ____________ Seat No._____

Acknowledgement

In preparing this project, I feel great pleasure because it gives me extensive practical knowledge in my career. I got idea about Universal Banking. I express my deep sense of gratitude to My Guide Name of Guide for her valuable guidance during my project work. I am thankful to Name of Guide (Faculty Guide) for valuable inspiration and guidance provided me throughout the course of this project. They have patient and critically gone the subject matter. I would like to take opportunity to express my gratitude towards all of them who have contributed directly or indirectly in my project work. I would like to first thank our principal Sir Dr. Raju Chandnani. I would like to take opportunity to express my gratitude to my God, Parents that have supported me and my friends who have helped me for my project work.

Executive Summary:
Insurance industry globally has been growing in a demographic progression. The insurance sector is an important and increasingly internationalizing industry. Today insurance is widely accepted as one of the important financial instrument in an individuals portfolio. Insurance industry made its debut in India well over 100 years ago. Till recently, the life insurance corporation of India Ltd. Was wielding a monopolistic hold in this line of business due to nationalization of the sector in India and was being regulated by the Insurance Act, 1938. Recognizing the need for reforms in the insurance sector, the government of India appointed the Malhotra committee to seek and identify the measures required for the reform process. The insurance Regulatory and Development Authority (IRDA) as result was formed on the recommendation of the Malhotra Committee, as an independent regulatory body for the insurance industry in India, evolving mechanisms for licensing, monitoring, capital adequacy, investment norms, audit and more due to the implementing entry of private sector players in the insurance sector. In view of the above development, it become imperative to introduce robust system/process that would not only address to the problems relating to internal control, financial transparency, equity but would also bring effective governance so as to serve the interests of management, stakeholders, consumers, users, regulatory authority, government and general society. It is in above background, the Auditing practices committee of the institute is bringing out this guidance note for audit of life insurance business. This guidance note seeks to provide specific guidance on application of generally accepted auditing principals in the context of life insurance business. The purpose of this guidance note is to assist members in carrying out their attest functions in a more effective and efficient manner. It covers only the statutory audit of companies

carrying on insurance business and not the internal audit or any other types of audits that may be required by the IRDA or the client. Although every attempt has been made to consider the latest circulars issued by the Insurance Regulatory and Development Authority on the subject, it is recommended that the members keep track of the latest updates and development in this sector for better performance and efficiency during the discharge of their duties. We are sure that this guidance note will enhance the confidence in the members to carry out the role of auditors in the insurance sector more diligently. The members may find this guidance note a useful tool while performing their duties as auditors.

INDEX
Chapter Topic No. INTRODUCTION TO INSURANCE 1 2
INTRODUCTION TO AUDITING

DEFINITION ORIGIN AND EVOLUTION

PRINCIPLES ADVANTAGES LIMITATIONS

3 4 5 6 7 8 9 10 11 12 13

APPOINTMENT, QUALIFICATION AND RIGHTS OF AN AUDITOR OF INSURANCE COMPANY AUDITING AND ASSURANCE STANDARDS PROCEDURE OF AN AUDIT AT DIVISIONAL LEVEL WORKFLOW IN COMPANIES CARRYING ON

GENERAL INSURANCE BUSINESS ACCOUNTING SCHEDULES ACCOUNTING FRAMEWORK FINANCIAL COMPANIES INTERNAL CONTROL RELATED TO GENERAL INSURANCE BUSINESS AUDITORS REPORT CONCLUSION BIBLOGRAPHY STATEMENTS OF INSURANCE