Reinsurance contract

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An insurance contract issued by one entity (the reinsurer) to compensate another entity for claims arising from one or more insurance contracts issued by that other entity (underlying contracts).

The requirements for the assessment of significant insurance risk in a reinsurance contract are the same as for an insurance contract. However, a reinsurance contract transfers significant insurance risk if it transfers substantially all of the insurance risk resulting from the insured portion of the underlying insurance contract, even if it does not expose the reinsurer to the possibility of a significant loss.

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