• a contract between a individual or entity
(the policyholder) and an insurance
company, where the policy holder pay
regular premiums in exchange for financial
protection
• it cover certain financial losses or
damages (accidents, illnesses, theft or
natural distaters
• pertains to financial institution that
provides insurance policies to individuals
or entities in exchange for premium
payments
• they asses risks and determine the terms
and costs of coverage
The primary functions of an insurance
companies:
• Underwriting (Evaluating risks)
• Claims Processing (Assessing and paying
claims)
• Risk Management (Developing strategies
to minimize losses)
Subject to the INSURANCE CODE OF
THE PHILIPPINES, which provides the
legal framework for all insurance-
related activities
INSURANCE COMMISSION
• Supervisory Role
• Licensing
• Financial Reporting and
Auditing
DEPARTMENT OF FINANCE
SECURITIES AND EXCHANGE
COMMISSION
BANGKO SENTRAL NG
PILIPINAS
NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY
RISK MANAGEMENT
FINANCIAL PROTECTION
REGULATORY
FRAMEWORK
PRODUCT
DIVERSITY
ECONOMIC
IMPACT
HISTORICAL BACGROUND
GROWTH AND EVOLUTION
GLOBALIZATION
CHALLENGERS AND OPPORTUNITIES
TECHNOLOGICAL ADVANCEMENT
LIFE INSURANCE
GENERAL INSURANCE
10.7%
Annually,
reaching 42.3
billion by
2033
3.8 billion by
2028
KEY TRENDS THAT SHAPES THE INDUSTRY
REGULATORY COMPLIANCE
DIGITAL TRANSFORMATION
MICROINSURANCE
LIFE INSURANCE
• Individual and Group
Life Insurance
• Investment-Linked
Products (Variable
Unit-Linked)
• Health and Critical
Illness Coverage
NON-LIFE INSURANCE
• Property and
Casualty
Insurance
• Motor Insurance
• Health Insurance
• Microinsurance
CAPITALIZATION
• 250 million by 2013
• 550 million by 2016
• 900 million by 2019
• 1.3 billion by 2022
SOLVENCY
• Life Insurance Companies (2% of
the total liabilities or fixed amount
of 100 million, whichever is higher)
• Non-Life Insurance Companies
(20% of the total liabilities or
fixed amount of 100 million,
whichever is higher)
• Pre-need Companies (50 million)
AS TO PURPOSE AND SCOPE
AS TO ACCOUNTING MODELS
AS TO MEASUREMENT
AS TO DISCOUNT RATE
AS TO RISK ADJUSTMENT
AS TO PROFIT RECOGNITION
AS TO PRESENTATION AND DISCLOSURE
AS TO RECOGNITION OF PREMIUMS
AS TO CONTRACT GROUPING
AS TO ONEROUS CONTRACTS
AS TO REINSURANCE
AS TO TRANSITION
AS TO PROFITABILITY AND EQUITY
• Aims to assess the accuracy and fairness of
financial statements
• Evaluate whether insurance liabilities and
reserves are sufficient to meet future
obligations
• Verifies compliance with regulatory requirement
set by the Insurance Commission
• Assess internal control, risk management
systems, and the effectiveness of cybersecurity
measures
• Provides independent opinion on the company’s
financial health
PLANNING THE AUDIT
RISK ASSESSMENT
• Understanding the
Regulatory Framework
• Evaluating Business Risk
• Defining the Scope of the
• Internal Control Review
Audit
• Setting the Audit
Objectives
• Gathering Documents
• Regulatory Compliance
Risk
EXECUTION OF THE AUDIT
TESTING INTERNAL CONTROL
• Review Control
• Conduct Sample Testing
Environment
• Gather Evidence and
• Test Control Activities
• Evaluate Information and
Communication Systems
• Test Monitoring Activities
Document Findings
• Communicate Results and
Recommendations
EXECUTION OF THE AUDIT
SUBSTANTIVE TESTING
• Test Premium Revenue
Recognition
• Evaluate Claims Processing
• Examine Underwriting
Practices
• Test Reinsurance Transactions
• Evaluate Regulatory
Compliance
• Documentation and Evidence
Gathering
•
Analyze
Financial
Ratios
and
• Assess Investment Valuation
Trends
EXECUTION OF THE AUDIT
ACTUARIAL VALUATION
• Assessing Insurance Liabilities
• Reviewing Underwriting Practices
AUDIT OF IT SYSTEMS
• System Audits
• Cybersecurity Assessment
EXECUTION OF THE AUDIT
REPORT PREPARATION
• Audit Findings
• Audit Opinion
• Recommendation
ADDITIONAL CONSIDERATION
• Special Audits
• Compliance with IFRS17
0
