What is the code of conducts for general insurance?

Ans: general insurance business refers to fire insurance, marine insurance and miscellaneous insurance business i.e- workmens compensation insurance motor car insurance, accident insurance etc. With a view to attaining high stands of conduct and to avoid malpractices amongst general insurance companies the executive committee of the general insurance council has laid down a code of conduct for the companies caring on general insurance business. The main provisions of the code may be stated as under: a. Minimum Reserve: The insurance companies are required to maintain a minimum reserve for unexpired risks. The minimum reserve shall be fifty persent(50%) of the net income in the year in the case of fire and miscellaneous insurance and hundred persent in the case of marine insurance bisiness. b. Mini8mum security margin: the company should maintain a certain minimum margin between their assets and their liabilities which is called minimum security margin. Minimum security shoulkd be in excess of assets over liabilities vy at least tk-50,00,000. or ten present of net premium income which ever is higher. c. Premium: the premium should be collected before the commencement of risk except, when a bank guarantee to cover the premium is given or whire the insured has kept a sufficient deposit to cover the premium. d. Administrative Machinary: the excutive committee of general insurance council is empowered to appoint inspector to inspect the companies with a view to find out whether the business is being conducted according to law , rules and regulation. e. Control over the appointment of staff: the code provides control over the appointment and conduct of insurance agents, inspectors and field workers and brance offices. f. Availability of information: certain information required by the code regarding premiums, commissions claims refund and administrative and development expencess. g. Inspection of Accounts: the accounts of the companiesare subject to inspection by the auditors or inspetors appointed by the executive committee of the general insurance councile. h. Payment of expences: expencess above tk-50 should be made by cheque. i. Payment of commissions: payment of commission should be paid by cheques> j. Payments of claims: claims should be paid by chuquds. k. Management expencess: according to the code of conduct, management expencess ahould be classified as I. Directors fees II. Salaries III. Gratuities IV. Contributions to providend fund V. Traveling expencess VI. Postage and telegrams VII. Entertainment expencess

VIII. IX. X. XI. XII. XIII.

Audit fees Head office expencess Legal expencess Commission paid to any director for loss of service Advertising expencess Stationery and printing etc.

Finally we can say that, the above mentioned requirements must be fulfill for the pruposes of conducting general insurance business regarding cod of conduct for general insurance.

What are the rules and regulations regarding the accounts of insurance company? Ans: The accounts of insurance company must be prepared as per insurance company act. An insurance company carrying an different classes of insurance business must have separate accounts for such class of insurance business. The following procedure as prescribed by the insurance act and practice is followed: 1. separate account: where an insurance company carries on business of more than one class it shall deep a separate account of all receipts and payments in respect of each class of insurance business such as revenue account and balance sheet. 2. agent commission or remuneration: when general insurance business is to be done through an insurance agent can not be paid as commission ro remuneration more than ten percent of premium payable an the policy. In case of fire or miscellaneous xXXXXX this rate should be ten percent. 3. register of policies: every insurance company is required to maintain register of policies. The register must record the following particulars. a. The name and particulars of the policy holder. b. The date an which the policy was taken by the insured. c. In case of transfer of the policy, date and name of the person 4. register of claims: every insurance company should maintain register of claims to contain the following information: a. the date an which the claim was made. b. The name and address of the claimant c. The date on which the claim was settled and discharged or rejected. 5. principle agent commission: in case of fire and miscellaneous insurance policy principal agent rights to claim not more than 20% of the premium payable an insurance policy. This rate should be not more than 15% an a marine insurance. 6. rules regarding grant: insurance company is not allowed to grant any loans or tempory advances to any director, manager, actuary or auditor or any other officer. Loan maybe given against mortgage. 7. Management expanses: an insurance company has right to spent as its management expenses in any year an amount in excess of the permitted amount. The excess amount should be allowed by the executive committee of the general insurance council.

8. agent and management expenses accounts: Every insurance company must be minted agent account separates and must be maintained management expenses account including also commission. 9. confermation of the agent balance:Insurance company must obtain confermation of the agents balance at the end of each year. The confermation of the agents balance should be signed by the auditor and by the principal officer of the insurance company should be furnished to the controller of insurance along with the annual accounts. 10. Bad debts : A statement of the agents balance written off as bad debts and such bad debts duly signed by the auditor and the principals officer of the insurance company should be sent to controller of the insurance company should be sent to controller of insurance along with the annual accounts . 11. financial statement: every insurance company must at the end of each calendar year preparea. Balance sheet as per second schedule, b. Profit and loss account as per first schedule, c. in case of sub class of insurance business separate revenue account should be prepared. 12. Auditing: the balance sheet the profit and loss account profit and loss appropriation account and revenue accounts are to be audited by a qualified auditor. 13. Valuation of fixed assets: fixed assets of an insurance company are valued at market price or realizable value for the purposes of the balance sheet. 14. Rules regarding fictitious assets: Fictitious assets, like the preliminary expencess development expencess, goodwill, commission on shares or debentures,, discount on share or debentures, deferred revenue expenditure etc may not be shown id the balane sheet of an insurance company. 15. Investment: Investments of an insurance copany must be shown in order of importance such as a. Fully secured b. Readily marketable c. Which produce a fair rate of interest Finally we can say that an audiotor should be thoroughly studied insurance company befor verifying, checking and testing the insurance company accounts. To be conducted and audited of the insurance company books of accounts, the above mentioned matters must be kept in mind for proper acknowledgment.