Gas Pipeline Uniform Accounting Regulations

61 (1) Insurance premiums paid to insurance companies shall be debited to account 723 (Insurance), unless the premiums are chargeable to clearing accounts or relate to

• (a) the construction of pipeline facilities; or

• (b) employee benefits.

(2) Insurance costs relative to the construction of pipeline facilities shall be debited pro rata to the appropriate plant accounts.

(3) Insurance costs relative to employee benefits shall be debited to account 725 (Employee Benefits).

(4) Any amount recovered from the insurance referred to in subsection (1), (2) or (3) shall be credited to the account or accounts originally debited with the related loss or expense.

(5) Where a company elects to create and maintain reserves for self-insurance, account 723 (Insurance) shall be debited with estimated amounts in lieu of commercial insurance premiums, and account 290 (Insurance Appropriations) shall be credited with the estimated amounts.

(6) A schedule of risks covered by self-insurance shall be kept showing the character of the risk covered and the rates used to compute estimated amounts referred to in subsection (5).

(7) The rates referred to in subsection (6) shall not exceed commercial rates for the same protection.

(8) Where, as a result of an event or accident covered by self-insurance, costs are incurred of a type that would normally be debited to an expense account, such costs shall be debited to the insurance appropriations account and any excess of the expenditure over the applicable self-insurance shall be debited to the appropriate expense account.

(9) Where the self-insurance schedule referred to in subsection (6) covers the retirement of plant, the accounting for the retirement shall be as outlined in section 36 and the self-insurance applicable to the retired item shall be transferred from account 290 (Insurance Appropriations) to account 105 (Accumulated Depreciation — Gas Plant) or account 106 (Accumulated Amortization — Gas Plant), as applicable.

(10) Where a company insures with a commercial insurance company any risks covered by self-insurance, the premiums for the insurance policy shall be debited to the insurance appropriations account and any recoveries under the policies shall be credited thereto.