Format of Revenue Account of a Life Insurance Company
__________Company
REVENUE ACCOUNT FOR THE YEAR ENDED 31ST MARCH
-----
Particulars Schedule Current
Year
Rs.
Premiums Earned – Net 1 xxx
(a) Premium xxx
(b) Reinsurance ceded (xxx)
(c) Reinsurance accepted xxx
Income from Investments xxx
(a) Interest, Dividends & Rent – Gross xxx
(b) Profit on sale/ Redemption of Investments (xxx)
(c) Loss on sale/ Redemption of Investments xxx
(d) Gain on Revaluation xxx
(e) Other Income xxx
Total (A) xxx
Commission 2 Xxx
Operating Expenses 3 xxx
Provision for doubtful debts xxx
Bad debts written off xxx
Provision for taxation xxx
Provisions (other than taxation) xxx
(a) For diminution in the value of Investments xxx
(b) Others xxx
Total (B) xxx
Benefits Paid (Net)
Interim Bonuses paid 4 xxx
Change in the value of liability in respect of policies xxx
(a) Gross
(b) Amount ceded in Reinsurance xxx
(c) Amount accepted in Reinsurance xxx
xxx
Total (C) xxx
Surplus/Deficit (D) = (A) – (B) – (C) xxx
Appropriations
Transferred to Shareholders’ Account xxx
Transfer to other Reserves xxx
Balance being funds for future Appropriations xxx
Total (D) xxx
Schedule 1 - Premium
No Particulars Current
. Year
Rs.
1 First year Premiums xxx
2 Renewal Premiums xxx
3 Single Premiums xxx
Total Premiums xxx
Schedule 2–Commission Expenses
Particulars Current
Year
Rs.
Commission Paid
Direct - First year Premium xxx
- Renewal Premium xxx
- Single Premium xxx
Add: Commission on re-insurance Accepted xxx
Less: Commission on Reinsurance ceded (xxx)
Net Commission xxx
Schedule 3–Operating Expenses
No. Particulars Current
Year
Rs.
1 Employees’ remuneration & Welfare benefits xxx
2 Travel, Conveyance and vehicle running expenses xxx
3 Training Expenses xxx
4 Rent, Rates and Taxes xxx
5 Repairs xxx
6 Printing & Stationery xxx
7 Communication expenses xxx
8 Legal and Professional charges xxx
9 Medical Fees xxx
10 Auditor’s and Expenses xxx
11 Advertisement and Publicity xxx
12 Interest and Bank Charges xxx
13 Others xxx
14 Depreciation xxx
Total xxx
Schedule 4–Benefits Paid (Net)
No. Particulars Current
Year
Rs.
1. Insurance Claims
(a) Claims by Death xxx
(b) Claims by Maturity xxx
(c) Annuities/ Pension xxx
(d) Others xxx
2. (Amount Ceded in Reinsurance)
(a) Claims by Death (xxx)
(b) Claims by Maturity (xxx)
(c) Annuities/ Pension (xxx)
(d) Others (xxx)
3. Amount Accepted in Reinsurance
(a) Claims by Death xxx
(b) Claims by Maturity xxx
(c) Annuities/ Pension xxx
(d) Others xxx
Total xxx
ADJUSTING JOURNAL ENTRIES
(1) For Claims intimated but not admitted
Claims A/c Dr. xxx
To Outstanding claims A/c xxx
(2) For bonus utilised in reduction of premium
Bonus in Reduction of premium A/c Dr. xxx
To Premium A/c xxx
(3) Interest accrued on investments
Accrued Interest A/c Dr. xxx
To Interest A/c xxx
(4) For Outstanding premiums
Outstanding premium A/c Dr. xxx
To Premium A/c xxx
(5) For claims covered under reinsurance
Reinsurance Claims A/c Dr. xxx
To Claims A/c xxx
(6) For Provision for taxation
Revenue A/c Dr. xxx
To Provision for Taxation A/c xxx
(7) For Writing back the outstanding claims
Outstanding Claims A/c Dr. xxx
To Claims A/c xxx
(8) For premium payable under reinsurance
Premium A/c Dr. xxx
To Outstanding premium A/c xxx
(9) For reinsurance recoveries due
Outstanding debtors A/c Dr. xxx
To Claims A/c xxx
(10) For Agents’ commission to be paid
Commission A/c Dr. xxx
To Outstanding Commission A/c xxx
Page No.13.173 Problem No.8
1. The following figures relate to Life Insurance Corporation for the year ended 31 st
March 2015, prepare the Revenue Account.
Rs. Rs.
Claims 39,000 Surrenders 9,000
Management expenses 14,000 Premiums received 1,51,000
Directors’ Fees 4,000 Life As. Fund (1-4-2014) 11,50,000
Audit Fees 3,000 Interest received 40,000
Medical Expenses 500 Rent Received 10,000
Agents’ Commission 5,000 Claims cancelled 500
Depreciation 4,000 Annuities 1,500
Bonus in reduction of premium 1,500
Consideration for Annuities granted 16,500
Adjustments:
(a) Outstanding Claims Rs. 3,000
(b) Outstanding Premiums Rs. 9,000
In the books of Life insurance Corporation company Limited
Schedules forming part of Revenue Account
Schedule 1 - Premium
No Particulars Current
. Year
Rs.
1 Premium Received 1,51,000
Add: Outstanding Premium 9,000
Total Premiums 1,60,000
Schedule 2–Commission Expenses
No Particulars Current
. Year
Rs.
1 Agents Commission Paid 5,000
Net Commission 5,000
Schedule 3–Operating Expenses
No. Particulars Current
Year
Rs.
1 Management Expenses 14,000
2 Director fees 4,000
3 Auditors fees 3,000
4 Medical expenses 500
5 Depreciation 4,000
Total 25,500
Schedule 4–Benefits Paid (Net)
No. Particulars Current
Year
Rs.
1. Claims paid 39,000
Add: Outstanding claim 3,000
Less: Claims cancelled (500)
---------
41,500
Total claim
2. Bonus in reduction of premium 1,500
3. Surrenders 9,000
4. 1,500
Annuities
Net Claims 53,500
REVENUE ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2006
Particulars Schedule Current
Year
Rs.
Premiums Earned – Net 1 1,60,000
Income from Investments
a) Interest Received 40,000
10,000
b) Rent Received 16,500
(f) Consideration for Annuities granted
Total (A) 2,26,500
Commission 2 5,000
Operating Expenses 3 25,500
Total (B) 30,500
Benefits Paid (Net)
4 53,500
Total (C) 53,500
Surplus (D) [(A) – (B) – (C)] 1,42,500
Problem No:9 Page No:13.174
Prepare in the proper statutory from the Revenue account of the super insurance company
limited for the year ended 31st march 2006 from the following figure
Rs. Rs.
Claims by death 76,140 Expenses of management 31,920
Claims by maturity 30,110 Commission 9,574
Premiums: Interest, dividends & rents 97,840
First premiums 2,50,000 Income tax on interests, dividends
Renewal premiums 3,55,690 etc., 35,710
Single premiums 1,00,000 Surrenders 13,140
Transfer fees 129
Consideration for Bonus in reduction of premium 980
annuities granted less re Dividend paid to shareholders 5,500
insurance 82,127
Annuities paid 53,461 Amount of life insurance fund at 15,21,000
Bonus paid in cash 2,416 the beginning of the year
Hints:
1. Bonus in reduction of premium should be shown only as expenditure in revenue A/c.
2. Income tax on interest, dividend etc., will be shown in schedule 12 of balance sheet,
since it is tax deducted at source.
In the books of Super Life insurance Corporation company Limited
Schedules forming part of Revenue Account of Super Life Insurance Company Limited
Schedule 1 - Premium
No Particulars Current
. Year
Rs.
1 Premiums:
First premiums 2,50,000
Renewal premiums 3,55,690
Single premiums 1,00,000
Total Premiums 7,05,690
Schedule 2–Commission Expenses
No Particulars Current
. Year
Rs.
1 Commission 9,574
Net Commission 9,574
Schedule 3–Operating Expenses
No. Particulars Current
Year
Rs.
1 Expenses of management 31,920
Total 31,920
Schedule 4–Benefits Paid (Net)
No. Particulars Current
Year
Rs.
1. Claims by death 76,140
Claims by maturity 30,110
--------
1,06,250
Total claim
2. Annuities 53,461
3. Bonus paid in cash 2,416
4. Bonus in reduction of premium
980
5. Surrenders 13,140
Net Claims 1,76,247
REVENUE ACCOUNT SUPER INSURANCE COMPANY LIMITED
FOR THE YEAR ENDED 31ST MARCH 2006
Particulars Schedule Current
Year
Rs.
Premiums Earned – Net 1 7,05,690
Income from Investments
a) Transfer fees 129
82,127
b) Considerations for annuity granted 97,840
c) Interest, dividend and Rent Received 1,80,096
Total (A) 8,85,786
Commission 2 9,574
Operating Expenses 3 31,920
Total (B) 41,494
Benefits Paid (Net)
4 1,76,247
Total (C) 1,76,247
Surplus (D) [(A) – (B) – (C)] 6,68,045
10. From the following figures, prepare Revenue account in statutory form, of the Star
Assurance Co. Ltd. for the year ended 31.3.2006. Rs (000)
Claims paid by death 142000
Claims paid by maturity 70200
Premiums 1412000
Consideration for annuities granted 164000
Annuities paid 106900
Bonus paid in cash 4800
Expenses of management 63800
Commission 19140
Interest, dividends and rents 195700
Surrenders 26300
Bonus in reduction of premium 1800
Dividend paid to shareholders 9000
Life Assurance Fund (1.4.05) 3045000
Claims outstanding (1.4.05) 22000
Claims outstanding (31.3.06) 16000
[Ans: Surplus before payment of dividend : Rs. ('000) 13,42,760)
In the books of Super Life insurance Corporation company Limited
Schedules forming part of Revenue Account of Super Life Insurance Company Limited
Schedule 1 - Premium
No Particulars Current
. Year
Rs.
1 Premiums received 14,12,000
Total Premiums 14,12,000
Schedule 2–Commission Expenses
No Particulars Current
. Year
Rs.
1 Commission 19,140
Net Commission 1 9,140
Schedule 3–Operating Expenses
No. Particulars Current
Year
Rs.
1 Expenses of management 63,800
Total 63,800
Schedule 4–Benefits Paid (Net)
No. Particulars Current
Year
Rs.
1. Claims by death 1,42,000
Claims by maturity 70,200
--------
2,12,200
Less Claims at the beginning 22,000
----------
1,90,200
Add Claims at the end
16,000
Total claim
2,06,200
2. Annuities 1,06,900
3. Bonus paid in cash 4,800
4. Bonus in reduction of premium 1,800
26,300
5. Surrenders
Net Claims 3,46,000
REVENUE ACCOUNT SUPER INSURANCE COMPANY LIMITED
FOR THE YEAR ENDED 31ST MARCH 2006
Particulars Schedule Current Year
Rs.
Premiums Earned – Net 1 14,12,000
Income from Investments
1,64,000
a) Considerations for annuity granted 1,95,700
b) Interest, dividend and Rent Received 3,59,700
Total (A) 17,71,700
Commission 2 19,140
Operating Expenses 3 63,800
Total (B) 82,940
Benefits Paid (Net)
4 3,46,000
Total (C) 3,46,000
Surplus (D) [(A) – (B) – (C)] 13,42,760
11. The following balances are extracted from the books of a life insurance business as,
on 31st March 2006.Rs
Life assurance fund as on 1.4.05 506000
Premiums 90000
Reinsurance premium paid 2075
Fines for revival of policies 15
Consideration for annuities granted 1500
Management expenses 21000
Income tax 850
Commission 18650
Claims 40000
Interest, dividend etc. 20000
Surrenders 3250
Medical fees 1505
Annuities 1955
Bonus in cash 600
Prepare the Revenue A/c for the year 2005-06 after making the following adjustment
Rs(000)
(a) Claim payable 9250
(b) Interest accrued on investment 2695
(c) Medical fees outstanding 375
(d) Outstanding premiums 3750
(e) Commission payable 750
(f)A claim of Rs. 500 Thousands included in the above claims payable is to be written off as it ten
years old and is not likely to arise.
(g)The managing director is to be paid at the rate of 5% on the net increased Life Assurance Fund
during the year before providing such commission
[Ans: Surplus after tax and Manager's Commission : Rs. ('000) 17,290]
In the books of Super Life insurance Corporation company Limited
Schedules forming part of Revenue Account of Super Life Insurance Company Limited
Schedule 1 - Premium
No Particulars Current
. Year
Rs.
1 Premiums paid 90,000
Less: Re- insurance Premium 2075
Add: Outstanding Premium 3750
Total Premiums 91,675
Schedule 2–Commission Expenses
No Particulars Current
. Year
Rs.
1 Commission 18,650
Add: Outstanding 750
Net Commission 19,400
Schedule 3–Operating Expenses
No. Particulars Current
Year
Rs.
1 Expenses of management 31,920
Income tax 850
Medical fees 1505
Add: outstanding
375
Total 34,650
Schedule 4–Benefits Paid (Net)
No. Particulars Current
Year
Rs.
1. Claims 40,000
Add: Outstanding claims 9250
---------
Total claim 49,250
Less: Claim cancelled 500
Net claim ---------
48,750
2. Annuities
1955
3.
Bonus paid in cash
4. 600
Bonus in reduction of premium
-
5. Surrenders
3,250
Net Claims 51,305
REVENUE ACCOUNT SUPER INSURANCE COMPANY LIMITED
FOR THE YEAR ENDED 31ST MARCH 2006
Particulars Schedule Current
Year
Rs.
Premiums Earned – Net 1 91,675
Income from Investments
c) Transfer fees 129
82,127
d) Considerations for annuity granted 97,840
c) Interest, dividend and Rent Received 1,80,096
Total (A) 8,85,786
Commission 2 9,574
Operating Expenses 3 31,920
Total (B) 41,494
Benefits Paid (Net)
4 1,76,247
Total (C) 1,76,247
Surplus (D) [(A) – (B) – (C)] 6,68,045
12. From the following figures relating to India Life Assurance Company for the year
ended 31.3.06, prepare a revenue account of the company:
Claims less reinsurance Rs (000)
By death 200000
By maturity 140000
Annuities 12600
Printing & Stationery 7700
Surrenders 4000
Commission 25050
Expenses of management 300000
Life fund on 1-4-05 3900000
Premium received 1500000
Claims outstanding on 1.405
By Death 80000
By Maturity 60000
Sundry incomes 6000
Consideration for annuities granted101200
Interest, dividends and rents 210000
Registration and other fees 200
Income tax 45000
Income tax on interest & dividends50000
Additional information:
(i)Claims outstanding on 31.3.06 by death Rs. 50,000 Thousands; by maturity Rs.40,000 Thousands.
(ii) Management expenses outstanding Rs. 6,000 Thousands.
(iii) Provide Rs. 4,500 Thousands for depreciation.
(iv) Permium outstanding on 31.3.06 is Rs. 2,00,000 Thousands.
[Ans: Surplus after Tax : Rs. ('000) 13,22,550)
[Hints : Income tax on interest and dividends will appear in Balance sheet - Schedule
12, asper IRDA form since it is a TDS.]
In the books of Super Life insurance Corporation company Limited
Schedules forming part of Revenue Account of Super Life Insurance Company Limited
Schedule 1 - Premium
No Particulars Current
. Year
Rs.
1 Premiums:
First premiums 2,50,000
Renewal premiums 3,55,690
Single premiums 1,00,000
Total Premiums 7,05,690
Schedule 2–Commission Expenses
No Particulars Current
. Year
Rs.
1 Commission 9,574
Net Commission 9,574
Schedule 3–Operating Expenses
No. Particulars Current
Year
Rs.
1 Expenses of management 31,920
Total 31,920
Schedule 4–Benefits Paid (Net)
No. Particulars Current
Year
Rs.
1. Claims by death 76,140
Claims by maturity 30,110
--------
1,06,250
Total claim
2. Annuities 53,461
3. Bonus paid in cash 2,416
4. Bonus in reduction of premium
980
5. Surrenders 13,140
Net Claims 1,76,247
REVENUE ACCOUNT SUPER INSURANCE COMPANY LIMITED
FOR THE YEAR ENDED 31ST MARCH 2006
Particulars Schedule Current
Year
Rs.
Premiums Earned – Net 1 7,05,690
Income from Investments
e) Transfer fees 129
82,127
f) Considerations for annuity granted 97,840
d) Interest, dividend and Rent Received 1,80,096
Total (A) 8,85,786
Commission 2 9,574
Operating Expenses 3 31,920
Total (B) 41,494
Benefits Paid (Net)
4 1,76,247
Total (C) 1,76,247
Surplus (D) [(A) – (B) – (C)] 6,68,045
