The Insurance Commission (IC) has reminded all insurance brokers and reinsurance brokers of the annual filing of audited financial statements by May 31, 2015, as part of the overall requirements for the renewal of their certificates of authority to do business.
Insurance Commission Emmanuel F. Dooc issued Circular Letter 2015-21, reminding insurance brokers and reinsurance brokers of the May 31 deadline for the filing of the financial statements and attachments in connection with the renewal of certificates of authority.
The audited financial statements, together with the complete set of attachments as prescribed by the circular, must be submitted to avoid the penalty of P5,000 per day of delay.
Among the documents required to be attached to the audited financial statements required to be filed by insurance and reinsurance brokers are two copies of audited financial statements, signed by an external auditor accredited by the IC; certification of the accredited auditor who signed the financial statements; adjusted trial balance as of December 2014, signed by the chief accountant; reconciliation statement of accounts in the adjusted trial balance to tally with the accounts in the audited financial statements; and two copies of a statement of business operations.
Other supporting documents must also be presented to prove the following: cash on hand and in banks; investment in bonds and Treasury bills; investment in stocks and other investments; real estate owned; premiums receivable from reinsurers; commissions receivable; accounts receivable; equipments and other assets; premiums payable to insurers and reinsurers; accounts payable; advances to and from officers and stockholders; taxes payable; and stockholders’ equity.
Insurance and reinsurance brokers earn commission by negotiating, selling and soliciting insurance contracts on behalf of their principal, who can either be the insured or the insurer.
The insurance brokers generally work as agents for the insured but their commission is paid by the insurance company that actually issues the insurance policy on behalf of the brokers’ clients.
The brokers assess the insurance coverage that a particular client needs, negotiate for better insurance coverage on behalf of the clients, and help their clients in making claims on their insurance policies.