Page 41 - Insurance Times July 2022

Star Health & Allied Insurance Universal Sompo
Premium is recognised as income over the contract period Premium earned including Reinstatement Premium is
or the risk period on the commencement of risk after recognized as income over the period of risk or the contract
adjusting for unearned premiums (Unexpired Risk) period based on 1/365 method, whichever is appropriate on
a gross basis,net of goods and service tax.
Unearned premium reserve is created as the amount
representing that part of the premium written (Net of
Reserves for Unexpired Risk Reserve for unexpired risk is
reinsurance ceded) which is attributable to and is to be
recognized net of reinsurance ceded and represents
allocated to the succeeding accounting periods. It has been
premium written that is attributable and to be allocated to
calculated at 50% of net written premium of preceeding 12
succeeding accounting periods for risks to be borne by the
months as per IRDAI directives.
Company under contractual obligations on a contract period
Unearned premium on reinsurance ceded is carried forward basis or risk period basis, whichever is appropriate. It is
to the period of risk and setoff against related unearned calculated on a daily pro-rata basis (1/365th method) for all
premium. lines except for Marine Hull. In case of Marine Hull reserves
shall be computed as 100% of net written premium during
Premium deficiency is recognised whenever expected claims
the preceding twelve months.
cost related expenses and maintenance costs exceed related
reserve for unexpired risks. The premium deficiency is
Premium deficiency is recognised at Company level when
calculated and duly certified by the appointed actuary.
the sum of expected claim costs and related expenses and
maintenance costs (related to claims handling) on the
Tata AIG
unexpired period of the in-force policies exceed the related
Reinsurance premium ceded on unearned premium is
reserve for unexpired risks. The Company considers
carried forward to the period of risk and is set off against
maintenance cost as relevant cost incurred for ensuring
related unearned premium.
claims handling operations. The Premium deficiency is
calculated and duly certified by the Appointed Actuary.
Reserve for unexpired risk, representing that part of the
premium written attributable and allocable to the
The Company has recognised Nil of the total premium
subsequent accounting period(s) is calculated net of
earned from the Miscellaneous -Engineering class of business
reinsurance cession on the basis of 1/365th method as per
based on varying risk pattern. The risk pattern determined
IRDAI Circular No. IRDAI/F&A/CIR/CPM/056/03/2016 dated
based on underwriting estimates which are inturn based on
April 4, 2016.
project related information received from the customers,
and these are relied upon by the Company.
Premium deficiency is recognised at segmental revenue
account level, when sum of expected claims costs and related
United India Insurance
expenses and maintenance costs (related to claims handling)
Premium income is recognised on assuption of risk and is
exceed the reserve for unexpired risks. The premium
adjusted for increase or decrease in reserve for unearned
deficiency is calculated and duly certified by the AA.
premium calculated as per 4.3 above.
For unearned premium reserve accounting, the amount of
Reserve for unexpired risks comprises of Unearned premium
reinsurance premium accepted for the risk assumed in the
reserve and Premium deficiency reserve.
current financial year on this account has been carried
forward to the subsequent accounting period at 50% of the
Unearned premium reserve is made on the amount
reinsurance premium accepted as unexpired risk reserve for
representing that part of net premium written which is
subsequent risk, if any, to be borne by the Company.
attributable to, and allocated to the succeeding accounting
There is no premium deficiency for the company on overall period/s at 50% of net premium except in case of marine
basis in accordance with para 2(2) of Schedule II of Insurance hull business, nuclear pool and terrorism (fire and
Regulatory and Development Authority of India (Assets, engineering) where it is made at 100% of net premium.
Liabilities and Solvency Margin of General Insurance
Business) Regulations 2016. Premium deficiency is calculated where the sum of expected
claims cost, related expenses and maintenance costs exceed
Extent of premium income recogised based on varying risk the related unearned premium. The premium deficiency is
pattern is nil. recognised as per IRDAI guidelines.

The Insurance Times, July 2022 41