Recognition conditions of premium income

There is a big difference between the two:

Earned premium: earned premium = retained premium+transferred back to unexpired liability reserve-deposited unexpired liability reserve+transferred back to long-term liability reserve-deposited long-term liability reserve.

Various incomes of insurance companies

1, premium income

Insurance premium is the actual amount charged by the insurer to the insured in order to fulfill some insurance liability.

Accounting system of insurance companies

Three conditions for the confirmation of premium income are stipulated: ① the insurance contract is established and the corresponding insurance liability is assumed; ② The economic benefits related to the insurance contract can flow into the company; ③ Income related to insurance contracts can be measured reliably.

Life insurance contracts generally take effect by collecting money, that is, when the premium agreed in the insurance contract arrives, the insurance company begins to bear the insurance responsibility.

No premium, no insurance liability. Therefore, life insurance companies should generally recognize premium income when they receive premiums. The insurance premium paid by the insured before the effective date of the policy cannot be recognized as premium income at this time, no matter according to laws or regulations, because the life insurance company has not yet assumed the insurance responsibility. The premium received at this time should be treated as the liability of the insurance company, that is, the premium is received in advance and recognized as premium income when the policy takes effect.

Non-life insurance contracts generally take effect through signing, that is, insurance contracts are established once they are signed, and insurance companies begin to assume insurance responsibilities.

However, due to the short term of non-life insurance contracts, it is more likely to collect premiums, and the amount of premiums can also be determined. Therefore, in practice, premium income is generally recognized when signing the bill. However, in the cargo transportation insurance contract, the date of signing is not consistent with the date of assuming insurance liability. At this time, the premium income obtained by signing the bill should be treated as advance payment, and it can only be recognized as premium income when the insurance liability is assumed. In addition, if the possibility of receiving the premium is less than the possibility of not receiving the premium, the insurance company should confirm the income when actually receiving the premium.

2. Investment income

Investment income is the income obtained by insurance companies from investing all kinds of insurance funds accumulated in the course of operation.

This is one of the most important sources of income for insurance companies. According to the current laws and regulations on the use of insurance funds in China, the main investment methods that insurance companies can use are: short-term bond investment, short-term capital investment, long-term bond investment, interbank lending, securities repurchase and policy pledge loan. In addition, in practical work, some insurance companies still have unrecovered equity investments made before the promulgation of the Insurance Law, equity investments specially approved by the State Council, and other loans except policy pledge loans issued before the promulgation of the Insurance Law.

According to the above different investment methods, the investment income is confirmed separately. (1) Confirmation of interest income from short-term bond investment

The interest income of short-term bond investment is not recognized as investment income when it is received, but it reduces the investment cost.

When selling bonds, the investment income shall be confirmed according to the difference between the actual amount received and the actual cost. 2) Recognition of cash dividend of short-term fund investment The recognition of short-term fund investment income is the same as that of short-term bond investment. When the cash dividend is received, the investment income is not recognized, but the investment cost is reduced. When the fund is sold, the investment income is confirmed according to the difference between the actual amount received and the actual cost. (3) Recognition of interest income from long-term bond investment The interest income from long-term bond investment is not recognized when it is received, but when the accrued interest is recognized at the end of the year and the interest payment date (not necessarily the same day), the difference after deducting related expenses and amortization of excess and discount (deducting premium and increasing discount) is recognized as investment income. (4) Confirmation of interest income of lent funds

The interest income of lent funds does not need to be confirmed on schedule, but is confirmed when the interest of lent funds is actually received. (5) Confirmation of income from buying and selling securities The income from buying and selling securities is confirmed according to the difference between buying and selling on the selling date. (6) Confirmation of interest income of policy pledge loan The interest income of policy pledge loan is confirmed when the insurance company actually receives interest.

3. Other income

In addition to premium income and investment income, other incomes of insurance companies include premium income, recovery income and other business income.

Enter.

(1) Divide premium income

Reinsurance premium refers to the premium obtained by the reinsurance acceptor and calculated by the reinsurance acceptor according to the reinsurance business. Reinsurance business

Fee income can generally be recognized when receiving reinsurance business bills. At this time, the receiver of reinsurance business begins to assume the insurance responsibility, and the premium amount is indicated on the bill of reinsurance business. It is likely that the receiver of reinsurance business has received reinsurance premium income, and it is not necessary to confirm the income when actually receiving reinsurance premium.

(2) Recovering income

Recovery income refers to some special insurance businesses, such as credit insurance. After an insurance accident, the insurance company pays in advance according to the contract.

Money recovered by agreeing to pay compensation to the insured and obtaining the right to recover the target price from the insured.

Theoretically speaking, indemnity is the deduction of indemnity expenditure, not income. However, due to the fact that several accounting periods often span between the occurrence of indemnity expenditure and the receipt of indemnity, if it is deducted as income, it is not conducive to reflecting the actual indemnity expenditure in the current period, so the indemnity is treated as income. The income from recovery payment is recognized when the recovery payment is actually received.

(3) Other business income

Other business income refers to the income of insurance companies engaged in other sales business besides selling insurance products or providing services related to insurance business.

Agency services and other business income.

① Labor income

Labor income includes the fee income obtained by insurance companies acting as agents for other insurance companies, as well as insurance companies.

When an insurance accident occurs in the underwriting business of other insurance companies, the on-site investigation income obtained by the agency shall be confirmed when it is actually obtained.

② Management fee income

Management fee income refers to the fact that in some non-traditional life insurance products (such as investment-linked insurance and universal life insurance), insurance companies are

Collect the income related to asset management and operation from customers by setting up an independent account. The management fee is included in the insurance premium paid by the insured, and the amount is clearly stipulated in the insurance contract, and its confirmation is generally synchronized with the confirmation of premium income.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.