Tax Polices Research Of Insurance Contract Reserves

In the context of economic globalization, China’s accounting standards have achieved substantial convergence with the International Accounting Standards. In order to stretch international insurance business, insurance accounting standards have adopted IFRS4phase II which is the most advanced research. Consequently, insurance tax policies and regulatory guidelines are also in progress on the basis of international experience. Since the implementation of the insurance contract accounting rules, recognition and measurement of insurance contract reserve meet qualitative change, which will directly affect the company’s current mode of operation, the internal management and product design. With the changing of accounting measurement of insurance contract reserves, its tax policy will face significant challenges.Based on the past accounting and tax policy research for insurance contracts reserve, this dissertation systematically analyses the recognition and measurement of insurance contract reserve and its tax policy in China. From a new perspective, I review the tax and accounting issues of insurance contract reserve. Then I made a longitudinal study of different periods of policy documents, illustrated the tax and accounting trend of insurance contract reserve that from consistency toward separation. Key Differences between tax policies and accounting rules for insurance contract reserve in China:tax policy of Unpaid claims reported(UCR), Claims incurred but not reported(IBNR) and loss adjustment expenses reserve on unsettled claims. The amount of the life insurance reserve, long-term health insurance reserve and unearned premium reserve deducted before tax is equal to the amount on the financial statements. At the same time, this dissertation selected a sample of41countries and regions as lateral comparison of accounting rules and tax policies for insurance contract reserve. Assumes that most of the41countries and regions will take a tax policy, and then the policy is reasonable. In addition, this dissertation also illustrates the principles of good insurance contract reserve tax policy, combined with the conclusions of the International Comparison; find the loopholes in China’s insurance contract reserve tax policies, trying to explore the reasonable tax policy in line with China’s economic conditions and to adapt to the characteristics of the insurance industry.The main part of first chapter is literature review of Insurance contract reserves from an accounting and tax perspective. Literature includes systematical analysis and brief evaluation of the mode of Insurance tax reform. At last, the chapter points out that the main research method is comparative study and content analysis.Chapter II is entitled "composition and basis of insurance contract reserve". This chapter first defined the research object-Insurance contract reserve, what kind included, the connotation and denotation of each kind. Then this chapter pointed out that the three foundations:measuring of insurance contract reserves based on accounting standards, regulatory rules and tax law.Chapter III is entitled "insurance contract reserve accounting system and the reforms". First this chapter made Longitudinal comparison of accounting system for insurance contrast reserve in accordance with the chronological order, pointed out that the reason why the accounting system had experienced reforming, that is accounting measurement of insurance contract reserve need to distinguish it from other basis, and enhance financial comparability. It divided insurance into life insurance non-life insurance to analyze accounting system respectively, which leads a research topic.Chapter IV is entitled "insurance contract reserve tax policies reform and the difference between tax policies and accounting rules". This chapter first analyzed insurance contract reserve tax deduction policies, scope of the policies from wide to narrow is divided into three stages:mixing financial and insurance companies, insurance companies and only reserve for insurance contracts. Finally, this chapter discuss relations between tax policies and accounting rules:consistent period, slight separation period and substantial separation period.Chapter V is entitled "International Comparison of tax policies of the insurance contract reserve". This chapter selected41countries and regions as the sample lateral comparison of tax policies of insurance contract reserve, summarized the similarities and differences, aims to provide enlightenment to policy recommendations. The conclusions of the International Comparison:the tax policies of the life insurance contract reserve and unearned premium reserve in China are consistent with the mainstream approach among41countries and regions. Amount of UPR and IBNR deducted before tax is very different from the book value, which is the same as nearly half of the countries and regions, but compared with other countries, the specific tax deduction policy of loss adjustment expense reserve in China is only similarity with Vietnam and Turkey.Chapter VI is entitled "the defects of insurance contract reserve tax policies and recommendations for reform". This chapter is summary and application of Chapter V, first elaborate the excellent standards of insurance tax policies, then pointed out the existence of the vulnerability of insurance contract reserve tax policies in china, at last put forward a number of policy recommendations:tax laws should take the initiative to coordinate with the accounting standards, to regulate the life insurance contract reserves, make up for deduction policy gap of the unexpired risk and loss reserve.The main innovation of this dissertation is that analysis both life insurance and non-life insurance contract reserve, and select a sufficient number of countries and the latest tax policy. Sample is richer than past researches. In the same time, the policy recommendations of this article are based on the latest measurement methods and tax laws.