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Home IFRS Masterclass IFRS 17 IFRS 17: What is a non-insurance component in an insurance contract?

IFRS 17: What is a non-insurance component in an insurance contract?

Insurance contracts are agreements that provide a set of rights and responsibilities that work together to produce a series of financial payments.

Some insurance contracts only offer coverage. However, many insurance contracts include components that would be considered part of another standard if they were accounted for separately.

These components might include investment elements, like pure deposits or financial instruments that promise to pay back a certain sum with interest; good and service components, like pension administration or risk management services; and embedded derivatives, like interest rate options or options tied to an equity index.