Accounting for Insurance Payments under Insurance Contracts
In insurance contracts, it is provided that when an insured event occurs, the insurance organization (insurer) makes insurance payments in the form of insurance compensation for property insurance and insurance coverage - for life insurance.
The insurance payment is made only if the insured event is substantiated by the documents that passed the examination and approved by the head of the organization, since the documents confirm the fact of the insurance event, the amount of damage caused and the amount of insurance compensation payable.
In order to summarize the information about insurance payments for the reporting period by the insurance company in connection with the occurrence of an insured event under insurance and coinsurance contracts, as well as on reimbursed premiums (premiums), paid redemption amounts and medical services provided, >
Insurance compensations or insurance amounts paid by the insured (beneficiary) in the reporting period in connection with the occurrence of the insured event, as well as payment of the insurer's expenses incurred in order to reduce losses, if they were necessary or were made by him for the performance of the insurer's instructions, are accounted for on subaccount 22.1.
Analytical accounting for account 22 is carried out by types of insurance, by insurers and other areas necessary for the preparation of reporting and management of the insurance organization. The organization of analytical accounting is necessary for calculating insurance reserves, controlling their movements, and analyzing the activities of the organization. The data of the analytical account on account 22 should correspond to the data of the register of insurance losses.
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In the debit of the subaccount 22.1, the insurer takes into account:
- the amount of the insurance indemnity paid or insurance sums under insurance contracts in connection with the occurrence of the insured event in correspondence with the credit of the cash accounting accounts or the credit of the account 78 (subaccount 78.5), if the insurance agent, insurance broker for payment of insurance compensation under insurance contracts sent the amount of insurance premiums (contributions);
- the amount of the reimbursed expenses of the insured made in order to reduce losses, in cases if they were necessary or were made by him for the performance of instructions of the insurer, in correspondence with the accounts of cash records;
- amounts deducted from insurance compensation or insurance amounts to pay off the debt of the policyholder for payment of the next insurance premium in correspondence with the credit of the subaccount 78.1;
- the amount of assessed taxes from insurance payments in the cases prescribed by law in correspondence with the credit of account 68 "Calculations on taxes and fees."
At the end of the reporting period, the debit balance of subaccount 22.1 is debited to account 99 debit.
A similar accounting procedure is also carried out under subaccount 22.2 "Insurance payments under co-insurance contracts". In this case, each participant in the co-insurance agreement - the insurer shall reflect on the subaccount 22.2 the insurance indemnity or insured sums paid under the co-insurance agreement in the part attributable to its share in the co-insurance agreement.
Losses of the insurance organization, related to the early termination or change of insurance conditions, are accounted for on subaccount 22.5. The debit of this subaccount reflects:
- insurance premiums (contributions) returned to policyholders in cases of early termination or change of conditions (reduction of the insurance amount, etc.) of the insurance contract, coinsurance relating to the type of insurance other than life insurance, in correspondence with the accounts of cash ;
- redemption amounts under life insurance contracts paid to policyholders upon early termination or change of conditions (reduction of the insured amount, etc.) of life insurance contracts, in the cases stipulated by the terms of these contracts, in correspondence with the accounts of money account;
- insurance premiums (contributions), subject to return to the reinsurer in cases of early termination of the insurance contract (main) or reinsurance contract, in correspondence with subaccount 78.3.
The credit of the subaccount 22.5 reflects insurance premiums (contributions) due to be returned by reinsurers in cases of early termination of the insurance contract (main) or reinsurance contract, in correspondence with the account 78, subaccount 77.8.
The balance of subaccount 22.5 at the end of the reporting period is written off to account 99 "Profits and losses."
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