Assume that you are a trainee accountant, and joined a Global insurance company. The actuaries explained to you about the life insurance company and also about the Valuation Balance Sheet is prepared once in every two years. He provided you with the information of AXA insurance Company and ZAP Insurance company.

The following information relates to AXA insurance Company amounts of balances of Life assurance funds for the previous year and current year respectively OMR 7,365,250 as of31st December 2019 and OMR 4,034,000 on31st December 2020 and the net liability as per actuary's valuation OMR 5,895,200, an interim bonus paid during the period OMR 156,230; Dividend still unpaid for the 31st December 2020 was OMR 62,300 and Surplus brought forward from the period 2019 was OMR 198,300; Premiums collected for the current period OMR 263,250

Actuaries also told to prepare a valuation balance sheet with a reduction of 40% in of its net liability for the year-end of 31st December 2020 whereas, there is no change in the Balance of Life Assurance Fund and other information related to the current year.

The following information relates to ZAP insurance Company amounts with amounts of balances of Life assurance funds for the current year and previous year respectively OMR 13,160,000 as of31st March 2019, OMR 10,160,000as of31st March 2018, and the net liability as per actuary's valuation OMR 11,160,000. The current period shows claims for the current period at OMR 245,000, an interim bonus paid during the period OMR 47,000; thedividend still unpaid for the 31st March 2019 was OMR 30,000. Surplus to carry forward the next period OMR 283,000.

Actuaries also told you that the company is planning to create a reserve of 20% of its available Life Assurance fund at the end of 31st March 2019 whereas there is no change in net liability and other information related to the current year.

Question 21 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Which of the following statements is correct with the effect of changes of surplus earned for 2020 after the reduction in net liability for AXA insurance company.

a. It will result in surplus

b. Deficit will increase

c. Life Insurance fund will have any effect

d. Net liability will not have any effect

Question 22 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Which of the following statements is correct with the effect of changes of surplus earned for 2019 to create a new reserve for ZAP insurance company.

a. Life Insurance fund will not have any effect

b. Surplus will increase

c. Net liability will have any effect

d. It will result in a deficit

Question 23 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Find the Deficit/Surplus earned by AXA insurance company for the period ending 31st December 2020.

a. RO (1775,280)

b. RO 2,166,430

c. RO 1,164,730

d. RO (2,166,430)

Question 24 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Calculate the Surplus/Deficit for AXA Insurance Company as at 31st December 2020.

a. Deficit RO 1,470,050

b. Deficit RO 1,861,200

c. Surplus RO 1,861,200

d. Surplus RO 1,470,050

Question 25 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text What would be the effect on surplus on creating a new reserve for AXA insurance Company with the reduction of net liability?

a. RO 496,880

b. RO 1,675,920

c. RO 5,007,170

d. RO 3,828,080