Section 64V of IA : Section 64V: Assets And Liabilities How To Be Valued

Explanation using Example

An insurance company, "SecureLife Insurance," is preparing its annual financial statements for regulatory submission. According to Section 64V of The Insurance Act, 1938, the company must value its assets such as investments, properties, and stocks at their current market or realisable value, without inflating their worth. For example, if SecureLife owns a property that has a market value of $1 million, it cannot be listed as $1.5 million in its financial records for compliance purposes.

Similarly, SecureLife must accurately calculate and include all its liabilities, like outstanding claims and policy payouts, with a proper value as prescribed by the regulations. This ensures that the company's financial health is not misrepresented by undervaluing its obligations.

Finally, SecureLife must submit a statement certified by an approved auditor (for general insurance) or actuary (for life insurance) to the Authority, confirming that the assets and liabilities have been assessed correctly as of March 31st. This statement is part of the returns filed under the Act and must be submitted within the timeframe specified by the regulations.