1 IFRS 17 Insurance Contracts establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the Standard. The objective of IFRS 17 is to ensure that an entity provides relevant information that faithfully represents those contracts. This information gives a basis for users of financial statements to assess the effect that insurance contracts have on the entity’s financial position, financial performance and cash flows.
2 An entity shall consider its … Continue reading
Level of aggregation of insurance contracts
14 An entity shall identify portfolios of insurance contracts. A portfolio comprises contracts subject to similar risks and managed together. Contracts within a product line would be expected to have similar risks and hence would be expected to be in the same portfolio if they are managed together. Contracts in different product lines (for example single premium fixed annuities compared with regular term life assurance) would not be expected to have similar risks … Continue reading
25 An entity shall recognise a group of insurance contracts it issues from the earliest of the following:
- the beginning of the coverage period of the group of contracts;
- the date when the first payment from a policyholder in the group becomes due; and
- for a group of onerous contracts, when the group becomes onerous.
26 If there is no contractual due date, the first payment from the policyholder is deemed to be due when it is received. An entity … Continue reading
Measurement (paragraphs B36–B119)
29 An entity shall apply paragraphs 30–52 to all groups of insurance contracts within the scope of IFRS 17, with the following exceptions:
- for groups of insurance contracts meeting either of the criteria specified in paragraph 53, an entity may simplify the measurement of the group using the premium allocation approach in paragraphs 55–59.
- for groups of reinsurance contracts held, an entity shall apply paragraphs 32–46 as required by paragraphs 63–70. Paragraphs 45 (on insurance contracts with
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Modification of an insurance contract
72 If the terms of an insurance contract are modified, for example by agreement between the parties to the contract or by a change in regulation, an entity shall derecognise the original contract and recognise the modified contract as a new contract, applying IFRS 17 or other applicable Standards if, and only if, any of the conditions in (a)–(c) are satisfied. The exercise of a right included in the terms of a contract is not … Continue reading
Presentation in the statement of financial position
78 An entity shall present separately in the statement of financial position the carrying amount of groups of:
- insurance contracts issued that are assets;
- insurance contracts issued that are liabilities;
- reinsurance contracts held that are assets; and
- reinsurance contracts held that are liabilities.
79 An entity shall include any assets or liabilities for insurance acquisition cash flows recognised applying paragraph 27 in the carrying amount of the related groups of insurance contracts issued, … Continue reading
Recognition and presentation in the statement(s) of financial performance (paragraphs B120–B136)
80 Applying paragraphs 41 and 42, an entity shall disaggregate the amounts recognised in the statement(s) of profit or loss and other comprehensive income (hereafter referred to as the statement(s) of financial performance) into:
- an insurance service result (paragraphs 83–86), comprising insurance revenue and insurance service expenses; and
- insurance finance income or expenses (paragraphs 87–92).
81 An entity is not required to disaggregate the change in the risk adjustment … Continue reading
93 The objective of the disclosure requirements is for an entity to disclose information in the notes that, together with the information provided in the statement of financial position, statement(s) of financial performance and statement of cash flows, gives a basis for users of financial statements to assess the effect that contracts within the scope of IFRS 17 have on the entity’s financial position, financial performance and cash flows. To achieve that objective, an entity shall disclose qualitative and … Continue reading
Appendix B Application guidance
This appendix is an integral part of IFRS 17 Insurance Contracts.
B1 This appendix provides guidance on the following:
- definition of an insurance contract (see paragraphs B2–B30);
- separation of components from an insurance contract (see paragraphs B31–B35);
- measurement (see paragraphs B36–B119);
- insurance revenue (see paragraphs B120–B127);
- insurance finance income or expenses (see paragraphs B128–B136); and
- interim financial statements (see paragraph B137).
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Definition of an insurance contract (Appendix A)
B2 This section provides guidance on the definition of an insurance contract as specified in Appendix A. It addresses the following:
- uncertain future event (see paragraphs B3–B5);
- payments in kind (see paragraph B6);
- the distinction between insurance risk and other risks (see paragraphs B7–B16);
- significant insurance risk (see paragraphs B17–B23);
- changes in the level of insurance risk (see paragraphs B24–B25); and
- examples of insurance contracts (see paragraphs B26–B30).
Uncertain future event
B3 Uncertainty … Continue reading