Use below given sequence, sequence in which company does its work of reinsurance, auditor should also in same sequence… if you any doubts ask back in this link
First company understands law then frames policy, then they authorise deal, then agreement which prescribe nature and affects premium & claim , then recording in registers then accounting , AS 11 , then presentation in p&l, then communication of loss / claim then at last IBNR and provisions
Audit of Reinsurance
- Compliance with Insurance Acts / IRDA regulations
- Policy of entity regarding reinsurance
- Validity of agreement
- Nature of reinsurance
- Computations of premium / claim
- Maintenance of registers for policy / premiums / commission / Claims
- Accounting of above, remember in case of ceded all items will be deducted
- Compliance of AS 11 / FEMA
- Prompt communication when claims are incurred
- IBNR claims
- Analytical Procedures
- Adequacy of provision in case when reinsurance accepted
Compliance of AS -11???
qUES: How compliance of As-11 is applied here???
Ques: IBNR claims meaning???
premium received or paid can be in foreign currency further receivable / payable also can be in foreign currency as many foreign companies do reinsurance
IBNR means Incurred But Not Reported Claims
Loss occurred on 28th March but not reported till, report finalisation of march, so it is called IBNR