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Qn'A Group 8 (Insurance Industry)
Qn'A Group 8 (Insurance Industry)
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Question and Answer of Group 8 - Audit of Insurance Industry includin
Response/Answers
The most commonly used insurance in the Philippines is the insurance covered by Philippine
Health Insurance Corporation known as PhilHealth because almost all, if not all, of the
working force of the country is covered by it.
Though both insurance covers the premise of life and health, there is a difference between the
two. Life insurance pays out a death benefit to your beneficiaries in the case of premature
death. The purpose is that the death benefit is sufficient to replace future income lost, as well
as cover expenses and obligations outstanding such as funeral costs, medical expenses, and
other debts - or to fund college savings accounts or spousal retirement. This gives the family
continuity of their finances so they do not struggle after death. Health insurance, on the other
hand, helps pay for medical expenses such as doctor's visits, hospital stays, medications, tests,
and procedures. This helps ensure that people can afford their medical expenses and stay
healthy.
It depends on the type of work you do and the size of the annual premium for the policy to be
audited. Generally, a policy is audited every year, but some policies may be audited every
third year. Also the financial statements of insurance companies can also be audited quarterly
for its assessment and will be audited yearly for its consolidated financial statements.
The records usually reviewed during an audit of insurance companies includes: (a) Payroll; (b)
Cash Disbursements; (c) Cash Receipts; and (d) Certificate of Insurance
Yes, detailed and properly-maintained records permit the auditor to complete the audit
accurately and in a minimal amount of time. Organized records afford the company the correct
classification and rating of its operation, while allowing any adjustments entitled to the
company.
A statutory auditor is an appointed auditor by the statute to audit a certain firm, business or
company. It is needed in insurance companies because an statutory audit is used determine if
an organization delivers an honest and accurate representation of its financial position by
evaluating information, such as bank balances, financial transactions, and accounting records
and insurance companies involves a lot of money from its customers/users while it is not
entirely sure whether the paid goods or services will be provided because it is basically up to
fate whether demise will happen to an insured person, property or belonging that is why an
statutory audit/auditor is needed.
The audit procedures is up to the audit guidelines of the company itself and the audit plan of
the auditor so eventhough it is the same insurance type, it can also differ from one another. To
answer the questions, yes it can differ but not because it is a different type of insurance but
because its audit procedures are up to the auditor and the guidelines of the company.
The HMOs Companies are required to submit their Audited Financial Statements on or before
May 31 each year to the Insurance Commission.
The examiners need to present the designation letter to the President of the HMO company
authorizing them to conduct the said examination.
They are expecting to be given permanent area within the HMO company where they can
work and leave in place the records/documents they are using throughout their audit
One week before terminating the examination, the supervisor should write a letter advising the
company of the conclusion of the examination. And on the last day of examination, the
examiner with the supervisor will inform the company of the termination of the examination
and thank the management for the help and cooperation extended to them during the
examination.
Yes, because there is a need for a verification procedure. The lnsurance Specialist verifies and
analyses the accounts in the Audited Financial Statements together with the supporting
schedules and documents to check if there are items considered as unaccounted assets and/or
non leger liabilities which may be resulted in a net worth deficiency and/or compliance with
liquidity requirement.
Yes, it is important to always compare treatment of accounts and any variations must be
explained. Also to know the basis of considering an asset as unaccounted or accounted. lt's
being accounted for or unaccounted for in previous years without knowing why, is not the
enough basis. Make it a point to analyze documents submitted by the company.
The documents to be arranged together with the verification folder are: (A.) Copy of
transmittal letter and other correspondences between lC and the company. (B.) Working
Balance Sheet, Summary of Unaccounted Assets NonLedger Liabilities (if any), Schedule of
Computation of Compliances and Summary of adjustments/ reconsiderations made, also
included the documents submitted during the Filing of 20XX Audited Financial Statements of
HMOs. (C.) Supporting documents of Asset, Liability and Net Worth accounts and other
submitted requirements.
PhilHealth, which is the most affordable of the three will cost you P1,400 to P6,600 a year.
This depends on how much you earn, and whether you are under the formal or informal
(voluntary) bracket. If you are employed, half of the contribution should be covered by your
company. For private health insurance, the lowest plan you can get would cost you P40,000
per year. The cost of HMO premiums vary depending on the coverage you’re getting. The
plans would cost anywhere from P10,000 to 60,000 per year.
In Philhealth, there is No age limit. Senior citizens are automatically covered for free. In
private health insurance, it only covers age 16 to 65 while in HMO, up to 65 only.
In Philhealth, the policy term for Senior citizens is indefinite, in Non-senior members - for as
long as they're actively paying. The policy term for private health insurance is fixed term.
While in HMO, the policy term is Yearly renewal and subject to health status assessment.
The contribution in Philhealth will be added to PhilHealth’s fund to extend financial assistance
to their members who are in need. In private insurance, the earned dividends can be
withdrawn. Whereas, in HMO, the Policy defaults back after 1 calendar year and your
contribution whether or not you’ve consumed your annual limit.
According to my research, they don’t really suggest that these two insurance actually works
against each other. But having both will provide better coverage for the policyholder because
if anything, health insurance, and HMO works hand-in-hand. HMO can cover you on the spot
medical expenses such as clinic visits or checkups and even hospital admission. Meanwhile,
the reimbursement scheme of health insurance can cover your long term medical expenses like
your medicine, more expensive diagnostic tests, and your overall hospital bills.
Most of us would probably look for providers that offer the cheapest premiums. However,
like any other package, cheaper premiums could mean limited services or limited accredited
physicians or hospitals. Based on my research, the things we should consider when choosing
are: (A.) Policy updates. A timely critique of health
insurance policies. This is probably the most important key indicator since it details the
coverage a person can avail. This also dictates the amount of premium that you are asked to
pay. (B.) List of affiliates and accreditation. The insurer often has a panel of accredited
physicians, hospitals or clinics. Having more accredited physicians and clinics simply means
that you have more choices. (C.) Inclusions. These are insurance companies that offer
inpatient as well as outpatient care to members. Some insurance companies only offer
inpatient services which means that if you have a respiratory problem that does not need
hospitalization, the costs you incur from recovering from your condition is not covered. This
may include medicines or medical supplies. So you’ll have to opt for hospitalization for your
expenses to be paid for by the insurance company.
For total protection and peace of mind, employee needs a combination of the three. PhilHealth
and HMO are already covered by the employers and are deducted monthly from the
employee’s salary, but they won’t cover the medical expenses entirely if ever the employee’s
do get hospitalized. Plus, HMO won’t cover once the employee retires but health insurance
provides a unique benefit that the first two do not have
It is important for the auditor to examine the management’s report for the purpose of verifying
there are no material inconsistencies in the same with the financial statements.
The Insurance commission is the insurance regulator in the Philippines. The Commission
supervises and regulates the operations of insurance and reinsurance corporations, which need
to be authorised.
The auditor should issue a separate certificate on verification of cash, cheques in hand and
others that are required by the Regulations.
The signature of the chairman, two directors and the principal officer of the company should
be seen in the accounts and statements.
Attached in the accounts and statements is a statement that contains the names, descriptions
and occupations of, and the directorships held by, the persons in charge of the management of
the business during the period to which such statements refers and by a report on the affairs of
the business during that period.
Yes, because insurance companies are one of the companies has an unusually large amounts of unearned premiums an
A statutory auditor is an appointed auditor by the statute to audit a certain firm, business or
company. It is needed in insurance companies because an statutory audit is used determine if
an organization delivers an honest and accurate representation of its financial position by
evaluating information, such as bank balances, financial transactions, and accounting records
and insurance companies involves a lot of money from its customers/users while it is not
entirely sure whether the paid goods or services will be provided because it is basically up to
fate whether demise will happen to an insured person, property or belonging that is why an
statutory audit/auditor is needed.
Reaction/Comment
mounts of unearned premiums and reinsurance and this amounts can fluctuate going up or down without
Question and Answer of Group 8 - Audit of
Leader: DE VERA, Kyle
Members: EVANGELISTA, Cristalyn
GABRIEL, Rosemarie
PARLAN, Andrea Maey
SUELTO, Joanne
Villanueva,
Where do examiners work in an on-site Gabriel,
4 Lorlie Mae
examination HMO Company? Rosemarie
Pamela
Gabriel,
7 Aleta, Beafel Is there a need for an off-site examination? Rosemarie
Response/Answers
The most commonly used insurance in the Philippines is the insurance covered by
Philippine Health Insurance Corporation known as PhilHealth because almost all,
if not all, of the working force of the country is covered by it.
The HMOs Companies are required to submit their Audited Financial Statements
on or before May 31 each year to the Insurance Commission.
PhilHealth, which is the most affordable of the three will cost you P1,400 to
P6,600 a year. This depends on how much you earn, and whether you are under
the formal or informal (voluntary) bracket. If you are employed, half of the
contribution should be covered by your company. For private health insurance,
the lowest plan you can get would cost you P40,000 per year. The cost of HMO
premiums vary depending on the coverage you’re getting. The plans would cost
anywhere from P10,000 to 60,000 per year.
It is important for the auditor to examine the management’s report for the purpose
of verifying there are no material inconsistencies in the same with the financial
statements.
It is a letter to be transmitted to the company addressed to the company's
president advising them the results of the verification together with a schedule of
non-ledger assets, unaccounted assets, non-ledger liabilities, and computation of
compliances. The company is given ten (10) days from the receipt of the said
transmittal letter to comply with the requirements, if any.
Though both insurance covers the premise of life and health, there is a difference
between the two. Life insurance pays out a death benefit to your beneficiaries in
the case of premature death. The purpose is that the death benefit is sufficient to
replace future income lost, as well as cover expenses and obligations outstanding
such as funeral costs, medical expenses, and other debts - or to fund college
savings accounts or spousal retirement. This gives the family continuity of their
finances so they do not struggle after death. Health insurance, on the other hand,
helps pay for medical expenses such as doctor's visits, hospital stays,
medications, tests, and procedures. This helps ensure that people can afford their
medical expenses and stay healthy.
The examiners need to present the designation letter to the President of the HMO
company authorizing them to conduct the said examination.
It depends on the type of work you do and the size of the annual premium for the
policy to be audited. Generally, a policy is audited every year, but some policies
may be audited every third year. Also the financial statements of insurance
companies can also be audited quarterly for its assessment and will be audited
yearly for its consolidated financial statements.
They are expecting to be given permanent area within the HMO company where
they can work and leave in place the records/documents they are using throughout
their audit
In Philhealth, there is No age limit. Senior citizens are automatically covered for
free. In private health insurance, it only covers age 16 to 65 while in HMO, up to
65 only.
The audit procedures is up to the audit guidelines of the company itself and the
audit plan of the auditor so eventhough it is the same insurance type, it can also
differ from one another. To answer the questions, yes it can differ but not because
it is a different type of insurance but because its audit procedures are up to the
auditor and the guidelines of the company.
The documents to be arranged together with the verification folder are: (A.) Copy
of transmittal letter and other correspondences between lC and the company. (B.)
Working Balance Sheet, Summary of Unaccounted Assets NonLedger Liabilities
(if any), Schedule of Computation of Compliances and Summary of adjustments/
reconsiderations made, also included the documents submitted during the Filing
of 20XX Audited Financial Statements of HMOs. (C.) Supporting documents of
Asset, Liability and Net Worth accounts and other submitted requirements.
The signature of the chairman, two directors and the principal officer of the
company should be seen in the accounts and statements.
Insurance companies, like any other companies, account for losses by debiting the loss
and crediting the lost asset. For example in the case of a theft, Loss on Theft will be
debited and then the company will credit the asset account which was stolen, which in
cases of insurance industry, Cash is the most prominent asset to be stolen. In cases
where the stolen asset is fixed asset, the record would be to debit Loss on Theft and also
debit the accumulated depreciation of the stolen asset then credit Property, Plant and
Equipment.
Most of us would probably look for providers that offer the cheapest premiums.
However, like any other package, cheaper premiums could mean limited services
or limited accredited physicians or hospitals. Based on my research, the things we
should consider when choosing are: (A.)
Policy updates. A timely critique of health insurance policies. This is probably the
most important key indicator since it details the coverage a person can avail. This
also dictates the amount of premium that you are asked to pay. (B.) List of
affiliates and accreditation. The insurer often has a panel of accredited physicians,
hospitals or clinics. Having more accredited physicians and clinics simply means
that you have more choices. (C.) Inclusions. These are insurance companies that
offer inpatient as well as outpatient care to members. Some insurance companies
only offer inpatient services which means that if you have a respiratory problem
that does not need hospitalization, the costs you incur from recovering from your
condition is not covered. This may include medicines or medical supplies. So
you’ll have to opt for hospitalization for your expenses to be paid for by the
insurance company.
Yes, detailed and properly-maintained records permit the auditor to complete the
audit accurately and in a minimal amount of time. Organized records afford the
company the correct classification and rating of its operation, while allowing any
adjustments entitled to the company.
Yes, because there is a need for a verification procedure. The lnsurance Specialist
verifies and analyses the accounts in the Audited Financial Statements together
with the supporting schedules and documents to check if there are items
considered as unaccounted assets and/or non leger liabilities which may be
resulted in a net worth deficiency and/or compliance with liquidity requirement.
According to my research, they don’t really suggest that these two insurance
actually works against each other. But having both will provide better coverage
for the policyholder because if anything, health insurance, and HMO works hand-
in-hand. HMO can cover you on the spot medical expenses such as clinic visits or
checkups and even hospital admission. Meanwhile, the reimbursement scheme of
health insurance can cover your long term medical expenses like your medicine,
more expensive diagnostic tests, and your overall hospital bills.
For total protection and peace of mind, employee needs a combination of the
three. PhilHealth and HMO are already covered by the employers and are
deducted monthly from the employee’s salary, but they won’t cover the medical
expenses entirely if ever the employee’s do get hospitalized. Plus, HMO won’t
cover once the employee retires but health insurance provides a unique benefit
that the first two do not have
Attached in the accounts and statements is a statement that contains the names,
descriptions and occupations of, and the directorships held by, the persons in
charge of the management of the business during the period to which such
statements refers and by a report on the affairs of the business during that period.
Reaction/Comment