IFRS 17 Best comprenhesive list of Insurance contracts definitions

Insurance contracts definitions

– Here are all of the IFRS 17 Insurance contracts definitions from Appendix A.

IFRS 17 Defined terms form C to I

Term
Definition
CSM
A component of the carrying amount of the asset or liability for a group of insurance contracts representing the unearned profit the entity will recognise as it provides services under the insurance contracts in the group.
Coverage period
The period during which the entity provides coverage for insured events. This period includes the coverage that relates to all premiums within the boundary of the insurance contract.
Current service cost
The increase in the present value of the defined benefit obligation resulting from employee service in the current period.
Deposit premium
The premium charged by the insurer at the inception of a contract under which the final premium depends on conditions prevailing over the contract period and so is not determined until the expiry of that period. Direct insurance contract means an insurance contract that is not a reinsurance contract.
Experience adjustment
A difference between:Value
  1. for premium receipts (and any related cash flows such as insurance acquisition cash flows and insurance premium taxes)—the estimate at the beginning of the period of the amounts expected in the period and the actual cash flows in the period; or
  2. for insurance service expenses (excluding insurance acquisition expenses)—the estimate at the beginning of the period of the amounts expected to be incurred in the period and the actual amounts incurred in the period. (see also Risk adjustment for non-financial risk below)
Financial risk
The risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, currency exchange rate, index of prices or rates, credit rating or credit index or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract.
Fulfilment cash flows
An explicit, unbiased and probability-weighted estimate (i.e., expected value) of the present value of the future cash outflows minus the present value of the future cash inflows that will arise as the entity fulfils insurance contracts, including a risk adjustment for non-financial risk.
Group of insurance contracts
A set of insurance contracts resulting from the division of a portfolio of insurance contracts into, at a minimum, contracts written within a period of no longer than one year and that, at initial recognition:
  1. are onerous, if any;
  2. have no significant possibility of becoming onerous subsequently, if any; or
  3. do not fall into either (a) or (b), if any.
Insurance acquisition cash flows
Cash flows arising from the costs of selling, underwriting and starting a group of insurance contracts that are directly attributable to the portfolio of insurance contracts to which the group belongs. Such cash flows include cash flows that are not directly attributable to individual contracts or groups of insurance contracts within the portfolio.
Insurance contract
A contract under which one party (the issuer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder.
Insurance contract with direct participation features
An insurance contract for which, at inception:Prohibited
  1. Contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items;
  2. The entity expects to pay the policyholder an amount equal to a substantial share of the fair value returns on the underlying items; and
  3. The entity expects a substantial proportion of any change in the amounts paid to the policyholder to vary with the change in the fair value of the underlying items.
Insurance contract without
direct participation features
An insurance contract that is not an insurance contract with direct participation features.
Insurance risk
Risk, other than financial risk, transferred from the holder of a contract to the issuer. Paragraphs B7 to B16 of IFRS 17 Insurance contracts provide guidance on what is insurance risk when applying this definition.
Insured event
An uncertain future event that is covered by an insurance contract and creates insurance risk.
Insurer
The party that has an obligation under an insurance contract to compensate a policyholder if an insured event occurs.
Investment component
The amounts that an insurance contract requires the entity to repay to a policyholder even if an insured event does not occur.
Investment-linked
Where the benefit amount under a life insurance contract or life investment contract is directly linked to the market value of the investments held in the particular investment-linked fund.
Liability for incurred claims
An entity’s obligation to investigate and pay valid claims for insured events that have already occurred, including events that have occurred but for which claims have not been reported, and other incurred insurance expenses.
Liability for remaining coverage
An entity’s obligation to investigate and pay valid claims under existing insurance contracts for insured events that have not yet occurred (ie the obligation that relates to the unexpired portion of the coverage period).
Policyholder
A party that has a right to compensation under an insurance contract if an insured event occurs.
Risk adjustment for non-financial risk
The compensation an entity requires for bearing the uncertainty about the amount and timing of the cash flows that arises from non-financial risk as the entity fulfils insurance contracts. (see also experience adjustment above)
Underlying items
Items that determine some of the amounts payable to a policyholder. Underlying items can comprise any items; for example, a reference portfolio of assets, the net assets of the entity, or a specified subset of the net assets of the entity.
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Insurance contracts definitions

Insurance contracts definitions

Insurance contracts definitions

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Insurance contracts definitions Insurance contracts definitions Insurance contracts definitions Insurance contracts definitions

Insurance contracts definitions Insurance contracts definitions Insurance contracts definitions Insurance contracts definitions

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