Study-Unit Description

Study-Unit Description


CODE INS2019

 
TITLE Insurance Accounting Principles

 
UM LEVEL 02 - Years 2, 3 in Modular Undergraduate Course

 
MQF LEVEL 5

 
ECTS CREDITS 4

 
DEPARTMENT Insurance and Risk Management

 
DESCRIPTION Accounting for the insurance industry is a specialist field that requires proficiency and a thorough understanding of the sector. This study-unit is an advanced insurance accounting course. It will be exploring the intricacies of accounting concepts when applied to general and life insurance companies, captive insurance companies and cell companies (PCCs and ICCs).

The study-unit will provide a comprehensive investigation of the accounting concepts when applied to insurance and reinsurance contracts, technical reserves and investments.

A detailed introduction to captive insurance companies and cell companies will be given, followed by an evaluation of typical structures involved and the distinctive accounting treatment applicable for each type of insurance company.

The study-unit will then examine IFRS 9 and IFRS 17, two standards which are crucial to the insurance industry.

Study-Unit Aims:

To familiarise students with the accounting treatment of general and life insurance companies, captive insurance companies and cell companies, in particular:

- To account for insurance and reinsurance contracts, technical reserves and investments;
- To familiarise students with captive insurance companies, and to gain an insight into the financial analysis and reporting required;
- To familiarise students with specific accounting rules and regulation pertaining to cell companies;
- To define the implications of the following International Financial Reporting Standards:
    - IFRS 17
    - IFRS 9
- To familiarise student with the different functions and the links between the accountant and:
    - the actuarial function
    - Solvency II
    - Compliance
    - Auditor
- To familiarise the student with solvency II.

Learning Outcomes:

1. Knowledge & Understanding:

By the end of the study-unit the student will be able to:

Familiarise themselves with the use and definitions of specific accounting treatments of insurance companies, including captive insurance companies and cell companies. Specifically:
- The advanced accounting principles for insurance companies;
- The financial analysis and reporting for captive insurance companies;
- The accounting for Protected Cell Companies (PCC);
- The accounting for Incorporated Cell Companies;
- International financial reporting standards such as IFRS 17 and IFRS 9.

2. Skills:

By the end of the study-unit the student will be able to:

- Define the various accounting and insurance terms when applied to different types of insurance entities;
- Demonstrate the necessity of setting up a captive insurance company and the financial analysis required;
- Recognise the need of setting up a cell company (PCC or ICC), understand its structure and the financial reporting required;
- Demonstrate the implications of IFRS 9 and IFRS 17 to insurance entities.

Main Text/s and any supplementary readings:

- Bullard, M. (2013). Insurance Accounting: Insurance Accounting. ISBN: 9781490481098.

 
STUDY-UNIT TYPE Lecture

 
METHOD OF ASSESSMENT
Assessment Component/s Assessment Due Sept. Asst Session Weighting
Presentation SEM2 Yes 40%
Multiple Choice Questions Examination (1 Hour) SEM2 Yes 60%

 
LECTURER/S

 

 
The University makes every effort to ensure that the published Courses Plans, Programmes of Study and Study-Unit information are complete and up-to-date at the time of publication. The University reserves the right to make changes in case errors are detected after publication.
The availability of optional units may be subject to timetabling constraints.
Units not attracting a sufficient number of registrations may be withdrawn without notice.
It should be noted that all the information in the description above applies to study-units available during the academic year 2023/4. It may be subject to change in subsequent years.

https://www.um.edu.mt/course/studyunit