338 Balance of Payments and International Investment Position Compilation Guide
A2.36 e implicit insurance service the insurance
company renders is a measurement of the output of
the insurance industry. e service provided to resi-
dents and nonresidents is derived by determining the
output of the insurance in a way that mimics the ac-
counting practices based on premiums earned and
losses incurred pertaining to the accounting period:
Gross premiums earned (from direct business)
Plus Net income from investments attributable to
policyholders (premium supplements)
Minus Estimated claims incurred (adjusted for claim
volatility, if necessary)
Equals Insurance service charge
Data sources
Conducting a survey of domestic
insurance companies
A2.37 e compiler can obtain most comprehen-
sive data for exports of insurance services from sur-
veying resident insurance companies. To enable an
appropriate coverage of the domestic insurance sector,
a survey frame should be available, including a list of
insurance companies, which may be provided by the
authority issuing the licenses for insurance business.
Insurance agents and brokers are usually required to
register with insurance authorities; therefore, a list of
these businesses should be readily available from of-
cial sources (see also Box A2.2).
A2.38 rough surveying domestic insurance
companies, the compiler is able to request information
on a conceptually correct basis as explained in previ-
ous paragraphs—that is, premiums earned and claims
due—as well as insurance technical reserves and the
income earned on those reserves.
A2.39 Resident insurance companies should report
details of premiums and claims in respect of business
obtained from abroad and in respect of international
reinsurance ows. In addition, these companies may
be asked to report details of premiums and claims in
respect of insurance written by them on imports.
A2.40 Supervisory institutions may be a source for
qualitative aggregate information. Although balance
sheets and pro t and loss account information from
those institutions may have the caveat of long timeli-
ness, they may be combined with information avail-
able from shorter-term external sector statistics (e.g.,
from the ITRS) or administrative data, for estimating
an interim (moving) measure for the distinction be-
tween national and international business.
A2.41 Insurance terms may di er due to di erent
accounting practices that are being applied in world-
wide insurance accounting.
6
A2.42 A model form for insurance survey is pre-
sented in Appendix 8.
Box A2.2 Insurance Sales Agents and Brokers
Insurance sales agents or brokers commonly sell one or
more types of insurance, such as property and casualty,
life, health, disability, and long-term care. They either
work exclusively for one insurance company based on
a contractual agreement, or work independently and
represent several companies at the same time. As fa-
cilitators, agents help match insurance policies for their
clients with the company, and help policyholders settle
their insurance claims. Insurance agents and brokers are
usually required to register with insurance authorities;
therefore, a list of these businesses should be readily
available from offi cial sources. An exploratory survey
could be undertaken to identify agents and brokers
placing insurance abroad.
The agent’s commission is generally a percentage of
each premium. If the insurance company that is sur-
veyed collects premiums directly from its policyholders,
the premiums balance receivable would include the full
amount of premiums due from policyholders. If agents
act as intermediary between insurance company and
policyholder, there are generally two possibilities. If the
insurance company uses an agent but charges directly
the policyholders for premiums due, the commissions
payable to the agent will not reduce the amount that
is received and recorded for premiums. If the agent
collects premiums on behalf of the insurance company,
the premium shown in the insurance accounts would
normally be recorded net of commissions. The compiler
should be aware of the possibility that premiums could
be collected by agents but not yet transferred to the
insurance company (uncollected premium balances), or
that commissions have been deducted (premiums gener-
ally should be recorded gross of agent commissions, and
commissions for agent services should be separately re-
corded). Insurance companies keep periodic statements
of the sums due and owed to an agent, sometimes
referred to as agents’ balances.
6
A joint International Accounting Standards Board and Finan-
cial Accounting Standards Board project on the accounting of
insurance contracts currently focuses on the recognition and
measurement of insurance contracts, and the presentation of in-
come and expenses arising from those contracts; see http://www.
ifrs.org/Current+Projects/IASB+Projects/Insurance+Contracts/
About+Insurance.htm .