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CS Professional · Banking and Insurance - Laws and Practice · Functions in Insurance and Compliance related thereto (Part IV)

Kaveri Life Insurance is a company whose accounts are already audited under the Companies Act, 2013. Under Section 12 of the Insurance Act, 1938, what is the position on a separate annual audit of its insurance accounts?

No separate audit is required. Section 12 requires annual audit of an insurer's accounts only where they are not already subject to audit under the Companies Act, 2013, and Kaveri's accounts are already audited under that Act.

  1. ANo separate audit is needed under Section 12, as it applies unless accounts are subject to audit under the Companies Act, 2013Correct
  2. BA second audit by a different auditor is required every year
  3. CA separate audit is required only for the revenue account
  4. DThe Authority must appoint the auditor in every case

Explanation

Section 12 requires annual audit of the balance sheet, profit and loss, revenue and appropriation accounts of every insurer unless they are subject to audit under the Companies Act, 2013. Kaveri's accounts already are, so no additional audit is needed. Where Section 12 applies, the auditor has the powers and duties of a company auditor under section 147 of the Companies Act.

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