Framo, Ryan Christopher

Section 12
Webinar 3: Audit of Insurance Industry

I. Specialized Industry
Mainly the emphasis on the nature of the insurance industry is that they are an
independent operating company wherein they operate on their own without the wait for the
government. They are self-sustained, wherein they do not rely on the budget of the
government. There are four functions of the group of insurance companies, first is the
financial examination, legal services, technical services, and management support services.
And these offices are broken down into different functioning groups/units in order to provide
their duty for customers.
As per the statistics of the presentation, there are mentioned five composite insurance
wherein it offers both life and non-life insurances. There are little composite insurance
companies because having multiple offered insurances require licenses.
At present, based on the data given in the presentation, there are twenty-five operating
life insurance companies, and forty-nine non-life insurance companies, fifty-seven brokers,
and eleven pre need companies.
II. Accounting standards applicable to the industry
Standards covered by insurance companies based on the given material:
 PFRS 16 - Leases
 PFRS 15 - Revenue from Contracts with customers
 PFRS 9 - Financial Instruments
 PRFS 17 - Insurance Contracts
III. Accounting Considerations
For the considerations of the insurance industry, first, the financial condition of the
client/s, the ability to make dividend payments, tax liabilities, bank covenants, employee
bonus and performance, based on the lessees. Also, as mentioned on the PFRS 15,
insurance contracts do not apply. There is also a consideration for the transition and
implementation of policies made in September 2015, that the IASB included in its exposure
draft the intention to defer the IFRS 9.
IV. Reflection and Learning Points
Among all of the recent webinars, insurance industry has been the most complex among
the rest, given that they operate independently without the budget for the government, but
let alone, they have so many compliances with the different regulations when it comes to the
insurances they are offering. This industry also has very wide range of standards that are
being followed, and in addition to that are the different Circular letters that are being
followed. I then realized on how important are these insurance companies in the countries,
in order to support large scale business especially on their financing and investing activities,
because with that big scale of a company, it will need a huge amount of capital in order to
move and operate well. Given that even small businesses consider these insurance
companies to cover up for some of the financial losses in the event of an unprecedented
event or a breakdown. (Schooley, 2022)

V. References (links)
Schooley, S. (2022, June 29). 26 Types of Insurance Your Small Business Should
Consider. Busuinessnewsdaily.Com. Retrieved July 12, 2022, from
https://www.businessnewsdaily.com/15781-types-of-business-insurance.html