Imágenes de páginas
PDF
EPUB
[blocks in formation]

Under these changed circumstances there can be no doubt that it is more advisable to keep the Premium Books and brokers' accounts net; and, although this method has up to the present only been adopted in a few isolated cases, yet there are signs that in the future it will largely supersede the present system. The disadvantages of the latter can be shown at a glance by the following illustration:-An underwriting agent submits to his "name" a list of balances owing by the brokers, as shown by his Ledger, amounting to, say, £3,000. This does not mean that they will realise £3,000. It does not even mean that they will realise that amount, less 10 per cent.—i.e., £2,700. To take an extreme instance, the £3,000 of balances may have been arrived at as follows:

[blocks in formation]

The discount of 10 per cent., however, is calculated on the premiums, and not on the balance, and consequently the actual position is:

[blocks in formation]

The discrepancy is obvious, and when working under this system it is almost imperative, from an accountancy point of view, to keep a Discount Reserve Account, which will be found fully explained in a subsequent chapter. On the net system, however, the necessity for such a Reserve Account disappears, and the list of brokers' balances will exhibit the actual position of affairs.

Although, therefore, advocating the adoption of the net system, the illustrative entries will be based on the older method, which remains at present in general use.

Although the form of Premium Book given is headed for the ordinary Voyage Policies, this is only done because these will usually form the bulk of the insurance effected, and it should be understood that in the case of Time Policies, &c., the same book will be utilised, the entry itself being modified according to circumstances. The amounts in the Premium columns will be posted to the debit of the brokers in the Brokers' Ledger, that book being also ruled with columns for each name, as will be shown later.

The monthly totals will be posted to the credit of the Premium Account in the Private Ledger.

Claim Books.

In these books are entered particulars of all claims that have been notified and become payable. The form appended will show the details that are inserted; the amount of the claim, which will be posted to the credit of the broker's account, being worked out for statistical purposes on the amount of the risk.

In order to arrive accurately at the profits of any one year, it is essential that all the transactions relating to that year, whether favourable or the reverse, should be incorporated in the accounts. The majority of claims that are taken down in any one year will not probably relate to insurances effected in that year, but will refer to those effected previously, and consequently it has been found necessary to keep each year's underwriting account open for a period of at least three years. It is necessary to differentiate each claim into the period to

C

[merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][ocr errors][merged small]

which it appertains-viz., the year when the insurance on which it has arisen was effected-and for this purpose separate Claim Books should be kept, relating to each year that remains open.

The monthly totals of each section will be posted to the Claim Account in the Private Ledger.

Re-Insurance Book.—

This book will contain particulars of any re-insurance the underwriter has thought fit to effect; either because he is of opinion that the risk is unusually dangerous, or because in order to keep up relations with two friendly brokers, thereby cultivating business, he has found it necessary to exceed his line on any particular risk.

These transactions are almost invariably effected through the medium of a broker, and consequently the premiums in connection therewith will be posted to the credit of the broker's account in the Ledger.

It will be necessary, as in the case of claims, to keep the re-insurance transactions relating to each particular year open entirely separate from one another.

The monthly totals of each section will be posted to the debit of the Re-insurance Account in the Private Ledger.

« AnteriorContinuar »