What Is Insurance Screening?

Insurance audit refers to economic activities that inspect and supervise the compliance, legality, and effectiveness of business activities and financial activities of insurance companies at all levels in accordance with national financial guidelines, policies, and the Insurance Law.

Insurance audit

Right!

Insurance audit refers to economic activities that inspect and supervise the compliance, legality, and effectiveness of business activities and financial activities of insurance companies at all levels in accordance with national financial guidelines, policies, and the Insurance Law.

Chinese name

Insurance audit

Definition

Inspection and supervision of insurance companies

Affiliation

Financial audit

the way

CIRC according to audit objectives

Insurance audit belongs to the category of financial audit. It is the supervision and management function specially performed by the CIRC. It conducts authenticity, legitimacy, and security of the business activities and related financial activities of insurance institutions based on accounting data and the national insurance policies and regulations. And effectiveness checks to promote the healthy development of insurance undertakings as a form of economic supervision.

Insurance audit is a form of economic supervision in which the CIRC conducts indirect control by administrative means. The CIRC, as the national financial supervision and management agency, assumes the government's supervision and management of the insurance industry, and has the right to take administrative measures to deal with violations and disciplinary actions in the insurance industry, such as ordering the suspension of insurance business, confiscation of illegal income, and suggesting that the supervisory department investigate the relevant leaders and responsibilities Human administrative responsibility. Insurance audit is not a direct supervision in the operation of insurance business. It is a kind of after-the-fact supervision, which is different from business activities and related financial activities. It is a financial activity in the form of currency and belongs to the category of economic supervision. The CIRC has independence and authority in the audit of the insurance industry. The CIRC has a separate audit department, which is not affected by other departments. It guarantees that the audit department can independently exercise its audit supervision power without any interference, and complete audit supervision tasks objectively and effectively.

The authority of the CIRC's audit is based on independence. The Insurance Law clarifies the legal status of the CIRC's audit in the form of national laws, and provides a legal basis for the audit department to exercise its audit power, ensure the quality of audit work, and perform its work functions. The audit of the CIRC has the right of inspection, evaluation, suggestion, processing and feedback. The right of inspection means that insurance institutions must not refuse and obstruct the inspection; the right of evaluation refers to the evaluation of the operation and management status, creditworthiness, and leadership level of the insurance institutions; the right of recommendation refers to businesses that are illegal, unsafe, and inefficient for insurance institutions The activity has the right to make suggestions and make corrections within a time limit; the processing right refers to handling the illegal and disciplinary activities of the insurance institution in accordance with relevant regulations; the feedback right refers to the problems, causes and countermeasures of the insurance institution to the audit department at the same level, a higher level, and The responsible unit of the audited insurance institution provides feedback.

The method of insurance audit refers to the form of supervision used by the CIRC to implement audit supervision in accordance with the audit objectives. The CIRC's audit methods for insurance institutions can be divided into different audit methods according to different classification standards. According to the audit scope, it can be divided into comprehensive audit and special audit; according to the audit implementation location, it can be divided into on-site audit and off-site audit; according to the audit deadline specifications, it can be divided into periodic audit and irregular audit; according to the specific objectives of the audit Classification can be divided into initial audit and follow-up audit; according to the audit organization, it can be divided into independent audit and joint audit and so on. Although there are many audit methods, each audit method does not work in isolation. In the actual audit, multiple audit methods are often intertwined and used together to assume the function of supervision.

The insurance audit procedure refers to the operating specifications and steps that the CIRC auditors must follow during the entire audit.

The procedures for auditing insurance institutions are divided into the following three stages:

(1) Audit preparation steps. Including organization preparation, data preparation, formulation of audit plans and sending audit notices.

(2) Implementation stage. Including listening to the self-examination report and actual inspection of the audited insurance institution.

(3) Report processing stage. This includes writing audit reports, drafting audit conclusions and processing opinions, sending audit conclusions and processing decisions, accepting appeals, and conducting follow-up audits.

The focus of audits on insurance institutions is underwriting audits, claims audits, and financial management audits.

(1) Underwriting audit. Underwriting audits include insurance contract audits, insurance rate audits, and underwriting quality audits.

(2) Review of claims. Insurance claims should be "active, swift, accurate, and reasonable." Adhere to the truth from facts. There should be a lot of points for compensation. The audit of claims shall include the audit of claims business and the audit of claims discipline.

(3) Audit of financial management. The audits of the financial management of insurance institutions are mainly audits, financial income and expenditure status, insurance reserve withdrawal and use, and insurance disaster prevention costs, publicity costs, handling costs, cost expenditures, etc.

The type of insurance audit comes from the division of insurance types. According to different classification standards, insurance can be divided into the following categories:

(1) According to the object of insurance, it can be divided into two categories: property insurance and life insurance.

Property insurance refers to insurance that targets the liability of property and its related interests; life insurance refers to insurance that targets human life and physical functions.

(2) Divided by the mode of operation, it can be divided into social insurance and general insurance

Social insurance refers to an economic security measure provided by the national government for its members to maintain basic living needs through social forms; general insurance refers to economic losses that can be obtained through the conclusion of contracts and the delivery of insurance premiums by policyholders Insurance for compensation or benefit payments.

(3) According to the scope of protection, it can be divided into liability insurance and guarantee insurance

Liability insurance refers to insurance that takes the liability for civil damages of the insured as the subject of insurance; guarantee insurance refers to insurance that takes the agreement between the guarantor and the creditor as the subject.

(4) Divided by the type of underwriting, it can be divided into original insurance, reinsurance, co-insurance and reinsurance

The original insurance refers to the insurance that the insurer and the insurer directly signed the insurance contract to form an insurance relationship. Reinsurance is also called reinsurance. It is the insurer who distributes part of its underwriting business to other insurers and will pay the premium Part of the transfer to reduce its own responsibility to facilitate the spread of risks, co-insurance, also known as co-insurance, is the insurance for two or more insurers to cover the same business within the same insurance period and scope, duplicate insurance , Means that the insured applies the same insurance subject to two or more insurance companies for the same risk, and the total amount of insurance generally exceeds the insurable value.

(V) According to the insurance business, it can be divided into domestic insurance and foreign-related insurance

Domestic insurance mainly includes property insurance and life insurance. Because insurance can be divided into different categories, the types of insurance audits are also divided accordingly. In order to facilitate the separate management of the insurance industry, we have classified insurance audits into three categories, namely, property insurance audits, life insurance audits, and foreign-related insurance audits. This is also required to implement international practices.

The object of insurance audit refers to the object of insurance audit. Specifically, it refers to the audited unit and its business operations. In order to correctly understand the objects of insurance audits, we must understand the following issues:

(1) Subject of insurance audit

The main body of insurance audit refers to the audit department and auditors of the central bank and various insurance companies. The main body of insurance audit is only the executor who performs audit supervision, not the object of insurance audit.

(2) Object of insurance audit

The object of insurance audit refers to the scope and content of insurance audit, that is, the object of insurance audit. Specifically, it refers to various types of audited insurance companies and their businesses, financial revenue and expenditure activities, and operations management.

The link of insurance audit is mainly based on the operation of insurance, that is, the four links of insurance industry, insurance underwriting, insurance disaster prevention and loss prevention, and insurance claim settlement.

The insurance industry refers to the business department of an insurance company, which is a process of extensively organizing and vigorously expanding insurance business through various forms of insurance publicity.

Insurance underwriting refers to the process by which the policyholder and the insurer both reach an agreement on the content of the insurance contract through negotiation and sign the insurance contract.

Insurance disaster prevention and loss prevention is to take proactive and effective measures in advance to prevent losses and injuries caused by natural disasters and accidents to human life and property.

Insurance claim refers to the performance of financial compensation or payment obligations as agreed upon when the insurer receives the insured within a prescribed time after the occurrence of an accident as defined in the insurance contract;

From the above four links, we can see that there is a mutual constraint and interdependence between them. Industry development and underwriting are the basis and prerequisites for disaster prevention, loss prevention and claims. Only through disaster prevention, loss prevention and claims, can we better play the social function of insurance, and further accumulate insurance funds / to improve the economic efficiency of insurance companies and Social benefits.

From the four links of insurance business operation, we can see the corresponding work requirements of the insurance audit link, that is, according to the specific work characteristics and procedures of each link, select the appropriate method and relevant content for audit supervision, so as to ensure the smooth development of insurance audit work. fruitful.