IFRS 17

An entity should apply IFRS 17 to:

• 1. Insurance contracts, including reinsurance contracts, it issues

• Reinsurance contracts it holds

• 1. Investment contracts with discretionary participation features it issues, provided the entity also issues insurance contracts.

• 1. All of the foregoing

IFRS 17 was introduced principally for what reason?

• To completely overhaul insurance accounting

• As response to recent scandals within the insurance industry

• To make improvements to insurance accounting

• Because of pressure from financial services authorities in several countries

Under IFRS 17, what is a contractual service margin?

• An explicit, unbiased and probability-weighted estimate 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.

• A component of the carrying amount of the asset or liability for a group of insurance contracts representing the unearned profit the entity will recognize as it provides services under the insurance contracts in the group.

• The amounts that an insurance contract requires the entity to repay to a policyholder even if an insured event does not occur.

• 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

Which type of insurance contracts would probably not be covered by IFRS 17?

• Life insurance

• Motor insurance

• Medical insurance

• Pension plan

IFRS 17 provides that insurance contracts should

• Comply with the IFRS Framework document

• Generally continue to be subject to existing accounting policies

• Comply will all existing IFRS

• Be covered by IAS 32 and IFRS 9

Under IFRS 17, what shall an entity recognize for the reduction in the liability for the effect of time value of money and the effect of financial risk?

• Insurance revenue

• Insurance finance income or expenses

• Prepaid insurance

• Insurance service expense

What is the basic revenue recognition principle under IFRS 17?

• profit is recognized on initial recognition of a group of insurance contracts but that a loss must not recognized if the group of contracts is onerous

• no profit is recognized on initial recognition of a group of insurance contracts but that a loss must be recognized if the group of contracts is onerous

• profit is recognized on initial recognition of a group of insurance contracts but that a loss must not recognized if the group of contracts is gratuitous

• no profit is recognized on initial recognition of a group of insurance contracts but that a loss must be recognized if the group of contracts is gratuitous

Manulife provides the following services except:

• Savings

• Protection plan

• Memorial plan

• Education plan

What type of insurance company is Manulife?

• Life Insurance

• General Insurance

Which statement is true about an insurance contract?

• The policyholder is the party that has a right to compensation under an insurance contract if an insured event occurs.

• The insurer is the party that has an obligation under an insurance contract to compensate a policyholder if an insured event occurs.

• The insured event is an uncertain future event that is covered by an insurance contract and creates insurance risk.

• All of these statements are true about an insurance contract.