Question
Case 3: Himayati Life Insurance is underwritten by AXA Insurance Gulf B.S.C., which is one of the largest insurance companies in the world. Himayati Life
Case 3:
Himayati Life Insurance is underwritten by AXA Insurance Gulf B.S.C., which is one of the largest insurance companies in the world. Himayati Life Insurance is offered to all customers. The scheme offers two plans - Basic and Premium; both insurance plans offer comprehensive protection, 24 hours a day, 365 days a year, the world over.
You are appointed as an accountant in AXA Insurance Company and required to prepare the final accounts for the company. The following balances were extracted from the books of the AXA Life Insurance as of 31 March 2019.
|
Particulars | Amount OMR |
Particulars | Amount OMR |
| Loans to other insurance companies |
7,500 | Commission on reinsurance ceded |
100,000 |
| Bad debts | 15,000 | Statutory Reserve | 59,000 |
| Share Capital | 150,000 | Furniture and fixtures | 75,000 |
| Life assurance fund | 186,000 | Maintenance | 6,000 |
| Investments | 84,000 | Cash Deposit | 96,000 |
| Bonus to policy holders | 15,000 | Premises | 67,500 |
| Surrender Value | 24,000 | Salaries to employees | 91,500 |
| Agents balances | 30,000 | General expenses | 21,000 |
| Consideration for annuities | 75,000 | Premiums less re-insurance | 180,000 |
| Depreciation | 21,000 | Claims less re-insurance | 150,000 |
| Dividends | 28,500 | Repairs | 18,000 |
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The following information is also available about the Outstanding claims at the end of the period ending 31st March 2019 is OMR 16,000; Commission received in advance OMR 6,000. Likewise general expenses paid in advance were OMR 3,000. Also the outstanding premium yet to be collected is OMR 6,000 and an additional depreciation on furniture and fixtures is to be provided for OMR 3,000.
You are required to prepare:
- Revenue account for AXA Life Assurance company and determine the closing Life Assurance balance at the end of the year (5 Marks)
- Prepare Balance Sheet as on 31stMarch 2019 (3 Marks)
- AXA Life Insurance company wants to offer vehicle insurance services in Sinaw, where they have 2500 vehicles. It is expected that, on average, 5% of the vehicles or 125 vehicles, may meet with an accident in a year. The economic value of the loss suffered by the owner of each vehicle is taken to be RO. 18,000.
Calculate the premium to be charged for insurance to the vehicle owner. (2 Marks)
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