PFRS 17
An entity shall apply IFRS 17 Insurance
Contracts to:
 Insurance and reinsurance contracts that it
issues;
 Reinsurance contracts it holds; and
 Investment contracts with discretionary
participation features (DPF) it issues, provided
it also issues insurance contracts.

Insurance contracts may be classified as :
◦ Direct insurance contract – insurer directly accepts
risk from the insured and assumes the sole
obligation to compensate the insured in case of a
loss event.
◦ Reinsurance contract – issued by one insurer to
compensate another insurer for losses on one or
more contracts issued by the cedant.

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.

Insurer (insurance provider) – the party that has an obligation to compensate
a policy holder if an insured event occurs.

Policyholder (insured) – a party that has a right to compensation under an

Insured event – an uncertain future event that is covered by an insurance

Insurance risk – risk other than financial risk, transferred from the holder of a
insurance contract if an insured event occurs.
contract and creates insurance risk.
contract to the issuer. (can be speculative risk or pure risk)


PFRS 17 provides a general measurement
model and a simplified model called
“premium allocation approach”
The general model is modified for onerous
contracts, reinsurance contracts held and
investment contracts with discretionary
participation features.

Initial measurement at the total of:
◦ The fulfillment cash flows, and
◦ The contractual service margin
 Subsequent measurement :
• the CA of the group of insurance contracts at the end
of RP is the sum of :
(a) the liability for remaining coverage comprising:
(i) the FCF related to future services and;
(ii) the CSM of the group at that date;
(b) the liability for incurred claims, comprising the FCF related to past
service allocated to the group at that date.
 The following are presentation separately in the statement of
financial position:
 Insurance contracts issued that are assets and liabilities
 Reinsurance contracts held that are assets and liabilities
 Recognized in the statement of P/L and OCI are separated into
the ff:
insurance service result, comprising insurance revenue and insurance
service expenses (in P/L)
• insurance finance income or expenses (full in P/L or separated into
amounts that are recognized in P/L and OCI, as an accounting policy
choice.
•