Important Points for IC 26 - Life Insurance Finance Exam
Page 26 Of 82
Go to:
Wherever an agent intorduces / brings a new business proposal and where the same is accepted and preserved, first premium commission is paid to him. Following accounting entry will be passed : Commission on First Premium A/c will be debited and Bank A/c will be credited.
The fund management expenses incurred by a life insurance company will be classified as direct expenses on a unit linked policy.
When the tax deducted at source is subsequently paid to the authorities, the Income-Tax Deducted Account will be debited and Bank A/c will be credited.
Section 40B of the Insurance Act, 1938 specifies limitations on expenses of management in life insurance business.
As per accounting practice adopted by LIC, depreciation is provided under "Straight Line" method on Gross Book Value or Assets.
MODELEXAM® 
www.realsoftinfoplan.com