Page 54 - Quick Insights Book 2022

Chap. 12 – Insurance Companies

an in-depth knowledge of the provisions of the Income Tax Act, NEW PRODUCT CREATION
1961 have ample opportunities in this area.
Chartered Accountants with appropriate customer understanding
INFORMATION TECHNOLOGY AUDIT can design appropriate products, determine price correctly and
increase profitability. They can advise on premiums, rebates and
Insurers/intermediaries are utilizing sophisticated technology the like for products unique to specific industries/companies and
either indigenous or imported in a big way. In such a scenario suggest risk-mitigating measures.
IT audit has a crucial role to play. It would prove useful right
from the day of initialization of the systems until it takes off and UNDERWRITING
stabilizes. Chartered Accountants trained under the ISA course
can find substantial avenues in this area. Underwriting, a core insurance activity, involves classification of
risks on the basis of risk characteristics so that insured parties
INVESTMENT AUDIT pay premiums proportionate to the risk. Chartered Accountants
can provide their services in analyzing the information to
Chartered Accountant firms are engaged to carry out specific determine the right prospect and also secure profitable business
purpose audits like audits to check level of compliance with the to the insurer.
Authority’s Regulations e.g., the regulations on investments of
insurance companies, audit of implementation of investment risk POLICY OWNER SERVICES
management systems and processes etc.
It has been accepted fact that notable new insurance business
PROCESS OUTSOURCING are generated through the existing policyholders and the
principles of Customer Relationship Management has to be
In a globalised setup and in a competitive environment, time adopted which warrants the involvement of professionals like
and resource management is vital. Insurance companies these Chartered Accountants.
days are outsourcing most of their non-core activities and back-
office functions. In a situation where BPOs carry out many CLAIMS ADMINISTRATION
tasks of an insurer/intermediary, Chartered Accountants can
provide their valuable services to ensure effective and foolproof This is a structured method of managing claims right from the
functioning of such outsourced activities. initial report to the final pay mentor appeal-typically following an
existing system. Claims processing is highly data intensive and
CONVERGENCE OF FINANCIAL SERVICES time sensitive. Chartered Accountants can provide their services
in effective management and understanding the system and
In a situation where the line of demarcation among the financial interaction with the concerned parties.
products is blurring towards convergence of financial services,
professional advices by knowledgeable person play a crucial MARKETING AND DISTRIBUTION CHANNELS
role.
Chartered Accountants with appropriate public interface can
CORPORATE GOVERNANCE NORMS ON help the public to appreciate the need for personal financial
INSURANCE COMPANIES planning, estate and retirement planning. Chartered Accountants
as an Insurance Advisors can render valuable advice to his
Corporate governance norms on insurance companies are clients/customers in selecting among various Non-Life Insurance
exposed for expert comments. It lays down a “whistle-blower” Policies. They can, based on the needs and risk profile of the
policy, allowing employees to raise concerns internally on client, advise them the best Insurance Policy to cover the risks
possible irregularities in financial reporting and governance to their life and property.
weaknesses and report in confidence to the chairman of the
board, or a panel of the board, or to external auditors. The INSURANCE BROKING
appointed actuary and statutory/internal auditors also are under
obligation to report any irregularity to IRDA if any insurer fails The opening up of the industry has resulted in a deluge of
to take corrective action. The corporate governance norms insurance products. Expertise in accounting and tax makes
reiterate the necessity for joint audit of each insurer, rotation Chartered Accountants ideal insurance brokers to render advice
of auditors, and a two-year cooling-off period on completion on technical matters, assist in negotiation and settlement of
of tenure as a statutory auditor in an insurance firm. The claims, maintain records of client’s business and much more.
guidelines also propose to make it mandatory for insurers to set
up internal committees on audit, investment, risk management, CLAIMS AUDIT SERVICE
asset liability management and policy holder protection to help This area calls for specialized knowledge in risk management,
the Board to discharge its responsibilities. audit of outsourced claims service providers and cost
Chartered Accountants have scope of various opportunities containment measures in relation to the overall claims spend.
within these norms too.

Quick Insights on Professional Opportunities for Chartered Accountants 41