While auditing Babel Financials, Inc., Vincenzo noted the below claims which could qualify as exceptions: a....
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While auditing Babel Financials, Inc., Vincenzo noted the below claims which could qualify as exceptions: a. The sum insured under Tae Ho's personal accident policy is P300,000 for loss of a limb. He loses an arm in an accident and claims under the policy. b. The limit of liability under Spacesweepers Ltd.'s public liability is P60,000,000. A customer makes a successful liability claim against them and damages of P90,000,000 are awarded. c. Inzaghi's motor policy is subject to a P3,000 damage excess. She makes a claim for damage to her car caused while she was parked by an unknown third party at P47,000. d. Wusang Office Supplies insured their warehouse contents against theft for P1,500,000. They made a claim for P150,000 following a burglary and the loss adjuster reports that the total actual value of the warehouse contents is P3,000,000 2/3 of which are totally gone/destroyed. The policy is subject to an average clause. Vincenzo noted that where a claim is valid, there are some circumstances where it will be only partially met by the insurer, but all of these claims are fully indemnified by Babel per examination of case reserves. Babel did not enter into a reinsurance contract for these four policies. According to Luca, his manager, a full indemnity will not be provided to the insured where: a. The sum insured is less than the value of claim the insurer's liability is restricted to the sum insured; b. The average clause operates - where the policyholder has under-insured their property; c. An excess applies the insured is responsible for the first amount of a claim; or d. A franchise exists - the insurer pays out once a limit has been reached. However, Luca emphasized that the insurer can make an 'ex-gratia' payment even though there is no valid cover - to enhance the image and reputation of the insurer or to avoid undue hardship for the insured. Determine the following: 21. How much shall be payable to Tae Ho? 22. How much shall be payable to Spacesweepers, Ltd.? 23. How much shall be payable to Wusang Office Supplies? 24. How much is the understatement (overstatement) in Babel's books for Inzaghi's motor policy if Vincenzo further noted that there is an unrecorded ex-gratia payment of P1,000 to Inzaghi? 25. All of the above information including #4 considered, give the entry to correct the balances of Claims Payable and Case Reserves/Direct Losses. While auditing Babel Financials, Inc., Vincenzo noted the below claims which could qualify as exceptions: a. The sum insured under Tae Ho's personal accident policy is P300,000 for loss of a limb. He loses an arm in an accident and claims under the policy. b. The limit of liability under Spacesweepers Ltd.'s public liability is P60,000,000. A customer makes a successful liability claim against them and damages of P90,000,000 are awarded. c. Inzaghi's motor policy is subject to a P3,000 damage excess. She makes a claim for damage to her car caused while she was parked by an unknown third party at P47,000. d. Wusang Office Supplies insured their warehouse contents against theft for P1,500,000. They made a claim for P150,000 following a burglary and the loss adjuster reports that the total actual value of the warehouse contents is P3,000,000 2/3 of which are totally gone/destroyed. The policy is subject to an average clause. Vincenzo noted that where a claim is valid, there are some circumstances where it will be only partially met by the insurer, but all of these claims are fully indemnified by Babel per examination of case reserves. Babel did not enter into a reinsurance contract for these four policies. According to Luca, his manager, a full indemnity will not be provided to the insured where: a. The sum insured is less than the value of claim the insurer's liability is restricted to the sum insured; b. The average clause operates - where the policyholder has under-insured their property; c. An excess applies the insured is responsible for the first amount of a claim; or d. A franchise exists - the insurer pays out once a limit has been reached. However, Luca emphasized that the insurer can make an 'ex-gratia' payment even though there is no valid cover - to enhance the image and reputation of the insurer or to avoid undue hardship for the insured. Determine the following: 21. How much shall be payable to Tae Ho? 22. How much shall be payable to Spacesweepers, Ltd.? 23. How much shall be payable to Wusang Office Supplies? 24. How much is the understatement (overstatement) in Babel's books for Inzaghi's motor policy if Vincenzo further noted that there is an unrecorded ex-gratia payment of P1,000 to Inzaghi? 25. All of the above information including #4 considered, give the entry to correct the balances of Claims Payable and Case Reserves/Direct Losses.
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Answer rating: 100% (QA)
ANSWER 21 Tae Hos personal accident policy has a sum insured of P300000 for loss of a limb Since he lost an arm in the accident he is entitled to the ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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