TRUE OR FALSE 1. PFRS 4 SUPERSEDES PFRS 17 2.INSURANCE RISK WILL BE DEEMED SIGNIFICANTLY ONLY IF AN INSURED EVENT COULD CAUSE AN INSURER TO PAY SIGNIFICANT ADDITIONAL BENEFITS IN ANY SCENARIO 3.PFRS 17 APPLIES TO REINSURANCE CONTRACTS 4.AN ISURANCE CONTRACT CANNO CONTAIN MORE THAN 1 NON- INSURANCE COMPONENT

TRUE OR FALSE 1. PFRS 4 SUPERSEDES PFRS 17 2.INSURANCE RISK WILL BE DEEMED SIGNIFICANTLY ONLY IF AN INSURED EVENT COULD CAUSE AN INSURER TO PAY SIGNIFICANT ADDITIONAL BENEFITS IN ANY SCENARIO 3.PFRS 17 APPLIES TO REINSURANCE CONTRACTS 4.AN ISURANCE CONTRACT CANNO CONTAIN MORE THAN 1 NON- INSURANCE COMPONENT

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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S1: One characteristic of an insurance contract is to transfer insignificant risk from the policyholder to the issuer. S2: Under the general model of PFRS 17, a group of insurance contract is initially measured at the fulfillment cash flows and the contractual service margin.A. Both statements are correctB. Only S1 is correctC. Both statements are incorrectD. Only S1 is incorrect
S1: It is more advantageous and beneficial to the insured if there are more riders included in theinsurance contract. S2: Life insurance policies, unlike other properties, do not requiresupervision or frequent examination to minimize risk and maximize results. A. S1 and S2 are trueB. S1 and S2 are falseC. Only S1 is trueD. Only S2 is true
1. The significant risk that is transferred from the policyholder to the issuer of an insurance contract is:a. Lapse or persistency riskb. Financial riskc. Expense riskd. Insurance risk2. Under the general model of PFRS 17, a group of insurance contracts is initially measured at:a. The fulfillment cash flowsb. The contractual service marginc. Either a or bd. Both a and b3. A group of insurance contracts is subsequently measured at:a. The liability for remaining coverageb. The liability for incurred claimsc. Either a or bd. Both a and b4. According to PFRS 17, an insurance contract is NOT derecognized when:a. Expiredb. Terms have been modified, and the modification is not substantivec. Terms have been modified, and the modification is substantived. Extinguished5. According to PFRS 17, an accounting service result is recognized in:a. Profit or lossb. Other comprehensive incomec. Statement of financial positiond. Partly in profit or loss, and partly in other comprehensive incomeUse the…
What is the consideration for the insurer in an insurance contract? 1.Premiums Paid 2.Risk Avoidance 3.The literal piece of paper the contract is written on is the consideration 4.An Insurance Contract does not require consideration
3330 Which of the following actions represents consideration in an insurance contract? a. paying the premium b. filing a claim c. missing the policy d. endorsing a policy
Which is not an essential characteristic of an insurance contract? A. transfer of significant risk from the issuer to the policyholder B. policyholder pays the issuer for the transfer of risk C. issuer indemnifies the policyholder for losses when the insured event occurs D. none of the above
Choose the best answer. 1.Which statement is TRUE about an insurance contract? * a.The insurer is the party that has an obligation under an insurance contract to compensate a policyholder if an insured event occurs. b.The policyholder is the party that has a right to compensation under an insurance contract if an insured event occurs. c.The insured event is an uncertain future event that is covered by an insurance contract and creates insurance risk. d.All of these statements are true about an insurance contract. 2. IFRS 17 provides that insurance contracts should * a.Comply with all existing IFRS b.Generally continue to be subject to existing accounting policies. c.Comply with the IFRS Framework document. d.Be covered by IAS 32 and IFRS 9 3.An insurance contract can contain both deposit and insurance elements. An example might be a reinsurance contract where the cedant receives a repayment of the premiums at a future date if there are no claims under the contract. Effectively this…
D6) Finance (Insurance risk management) For the following types of risk exposures, explain why the amount of insurance coverage may be significantly limited through contractual provisions such as exclusions, limits, coinsurance, and deductibles) or in some cases, totally no coverage at all. (at least 200 words)
TRUE OR FALSE 1. PFRS 17 allows and insurer to charge its accounting policies for insurance contract only if, as a result of its financial statements present information that is more relevant. 2. Outward reinsurance is where the premium and commission shall be accounted for in the different accounting period original policy to which the reinsurance relates. 3. Premium deficiency arises when the unearned premium reserve is less than the estimated claimed related expenses.
TRUE OR FALSE 1. PFRS 17 allows and insurer to charge its accounting policies for insurance contract only if, as a result of its financial statements present information that is more relevant. 2. Outward reinsurance is where the premium and commission shall be accounted for in the different accounting period original policy to which the reinsurance relates. 3. Premium deficiency arises when the unearned premium reserve is less than the estimated claimed related expenses. 4. In accordance with the accrual assumption, the full amount of the premium is recognized immediately as income when received; instead, the premium is normally regarded as being earned evenly over the period of the policy.
N1 How life insurance contracts are different from other financial services or products?
1. (a) “Insurance is a method of reducing risk”. Justify the statement. Briefly discuss the various method of eliminating business risk. (b) What do you mean by assignment in the context of insurance? Does assignment applicable in various main branches of insurance? (c) Compare and contrast between  Perils VS Hazards  Facultative reinsurance VS Treaty reinsurance