Insurance contracts definitions – Here are some of the IFRS 17 Insurance contracts Appendix A definitions. Other not listed here are directly available on IFRS Jargon.
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:
- 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
- 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)
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:
- are onerous, if any;
- have no significant possibility of becoming onerous subsequently, if any; or
- 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 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-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.
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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