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    Grace-AST Module 9

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    Devine Grace A. Maghinay
    This document discusses insurance contracts under PFRS 17. It defines an insurance contract as transferring insurance risk from the contract holder to the issuer. Insurance contracts must be presented separately on the statement of financial position as assets or liabilities. Insurance service revenue is recognized in profit or loss. The document also describes the level of aggregation for insurance contracts, which requires identifying portfolios and dividing them into onerous, non-onerous, and remaining contracts groups. Initial recognition of an insurance contract group is at the earliest of the coverage period start, first payment due date, or when the group becomes onerous.

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    Grace-AST Module 9

    Uploaded by

    Devine Grace A. Maghinay
    86 views2 pages
    This document discusses insurance contracts under PFRS 17. It defines an insurance contract as transferring insurance risk from the contract holder to the issuer. Insurance contracts must be presented separately on the statement of financial position as assets or liabilities. Insurance service revenue is recognized in profit or loss. The document also describes the level of aggregation for insurance contracts, which requires identifying portfolios and dividing them into onerous, non-onerous, and remaining contracts groups. Initial recognition of an insurance contract group is at the earliest of the coverage period start, first payment due date, or when the group becomes onerous.

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    Grace-AST module 9

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    This document discusses insurance contracts under PFRS 17. It defines an insurance contract as transferring insurance risk from the contract holder to the issuer. Insurance contracts must be presented separately on the statement of financial position as assets or liabilities. Insurance service revenue is recognized in profit or loss. The document also describes the level of aggregation for insurance contracts, which requires identifying portfolios and dividing them into onerous, non-onerous, and remaining contracts groups. Initial recognition of an insurance contract group is at the earliest of the coverage period start, first payment due date, or when the group becomes onerous.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    86 views2 pages

    Grace-AST Module 9

    Uploaded by

    Devine Grace A. Maghinay
    This document discusses insurance contracts under PFRS 17. It defines an insurance contract as transferring insurance risk from the contract holder to the issuer. Insurance contracts must be presented separately on the statement of financial position as assets or liabilities. Insurance service revenue is recognized in profit or loss. The document also describes the level of aggregation for insurance contracts, which requires identifying portfolios and dividing them into onerous, non-onerous, and remaining contracts groups. Initial recognition of an insurance contract group is at the earliest of the coverage period start, first payment due date, or when the group becomes onerous.

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    © All Rights Reserved
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    of 2

    MODULE 9: Insurance Contracts

    1. State the Scope and applicability of PFRS 17


    2. Define an insurance contract

     Insurance risk other than financial risk, transferred from the holder of a contract to the issuer.
     The following are presented separately in the statement of financial position:
    o Insurance contracts issued that are assets
    o Insurance contracts issued that are liabilities
    o Reinsurance contracts issued that are assets
    o Reinsurance contracts issued that are liabilities
     Insurance service – recognized in profit or loss
     Legal principles of insurance (CLIPSIG)
    o Contribution
    o Loss minimization
    o Insurance interest
    o Proximate Cause
    o Subrogation
    o Indemnity
    o Good Faith
     Insurance finance income and expense are recognize in full in profit or loss or disaggregated into
    amounts that are recognized in profit or loss and OCI.

    3. Describe level of aggregation and measurement of insurance contract.


    Level of aggregation
     IFRS 17 requires entities to identify portfolios of insurance contracts

     Each portfolio of insurance contracts issues shall be divided into a minimum of


    o A group of contracts that are onerous at initial recognition, if any
    o A group of contracts that at initial recognition have no significant possibility of becoming
    onerous subsequently, if any;
    o A group of the remaining contracts in the portfolio, if any.
     An entity is not permitted to include contracts issued more than one year apart in the same group.

     Recognition
    An entity shall recognize a group of insurance contracts it issues from the earliest of the following:
    (a) the beginning of the coverage period of the group of contracts;
    (b) the date when the first payment from a policyholder in the group becomes due;
    (c) for a group of onerous contracts, when the group becomes onerous.

     Measurement
    Initial recognition - group of insurance contracts at the total of:
    (a) fulfilment cash flows (“FCF”), which comprise:
    (i) estimates of future cash flows;
    (ii) an adjustment to reflect the time value of money (“TVM”) and the financial risks associated with the
    future cash flows;
    (iii) a risk adjustment for non-financial risk
    (b) contractual service margin (“CSM”).

    4. Nourish your soul


    Isaiah 32:17 The work of righteousness will be peace, And the effect of righteousness, quietness and assurance
    forever.

    When it comes to business, the honesty and righteousness of a person is meaningfully important. A company
    that is composed of truthful and decent characters is most likely a peaceful and cheerful company. As what is
    said in the verse, honesty gives us an award of assurance of success for all time.

    5. Quiz: Diagnostic Learning Log


    I learned that the recognition date of the group of insurance contract issued is at the beginning date or
    when is the issuance of contract issued.

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