Life Office Accounts

Abstract

The actual system of book-keeping used by an office will depend on many factors, such as the volume of business transacted, the departments into which the office is divided and the scope of their work, and the information required to be produced. This paper deals mainly with premium income accounts, as the production of the revenue account figure for premiums is more complex than that of other revenue items, and as more departments in an office are concerned with premiums in one connexion or another than with the other revenue items. The object of the paper is, therefore, to show the relationship between the requirements of various departments, i.e. the accountants, the valuation (Actuarial) department, the departments concerned with issuing policies, with collecting renewal premiums and with settling claims and surrenders, etc., and the different aspects peculiar to each. For instance, the accountants require premiums to be classified according to funds, e.g. Life, Annuity or Capital Redemption, whereas the department concerned with the collection of premiums requires them to be classified according to the method of renewal, e.g. monthly or non-monthly, or terms of non-forfeiture. The actual books of account will not be described in great detail but only the principal objects that are required of each book, which would be ruled to suit the workings of the office; and the specimen headings given in the Appendices to the paper are merely to illustrate the system of book-keeping being described, which relates to an Ordinary Life Office.