Sample #12

AndrewLAndrewL
edited October 2023 in CIA.IFRS17-PAA

Hi @graham,

I have never seen the criteria required for grouping, and CIA IFRS 17 Insurance Contracts p.104, 107-108, and it does not seem to relate to any reading we have on syllabus. Is that an old reading?

Solution says cannot be grouped if inception is more than 12 months apart.

  1. If group 1 starts 1 January 2023 and Group 2 starts 31 Dec 2023, can they be grouped? I would say YES based on the above.
  2. In sample 8, they say "Group #1 and #2 do not have coverage difference of more than one year => Combine". Are they assuming they both start within 1 year from each other?
  3. Is it inception that should be less than 1 year or inception?

Thanks!

Comments

  • Staff-T1Staff-T1

    Yes I believe that is an old reading which was removed from the syllabus

    1. What do you mean by 'start'? Groups cannot start -> Policies in a group can begin to provide coverage.
    2. No they mean the coverage length difference is only 6 months
    3. I don't understand your question, can you rephrase it.
  • AndrewLAndrewL

    Thanks @Staff-T1

    1. If group 1 is issued 1 January 2023 and Group 2 issued 31 Dec 2023, can they be grouped?
    2. For point 3, I was asking what exactly is the criteria for grouping? Do they need to be issued within 1 year from each other or have coverage length which overlap by less than 12 months? For example A and B issued on the same date, but one with term= 1 year and the other 3 years. Can they be grouped?

    Thanks!

  • Staff-T1Staff-T1
    1. If both groups only have that one policy then sure. You cannot group contracts that are issued more than one year apart.
    2. To be grouped together, contracts should be issued not more than one year apart, have the same profit profile and are similar risks managed together. There is nothing inherently wrong with grouping policies with differing terms together, provided they are similar risks and managed together
  • bennybees1bennybees1

    Is it safe to say we can disregard this sample question as groupings is no longer on the syllabus?

  • AndrewLAndrewL

    Hi @bennybees1,

    I personally would not exclude it. In one of the reading, it says that minimum group is:
    1. Group onerous
    2. Not likely to become onerous
    3. Remaining group

  • Staff-T1Staff-T1

    I still think it would be good to know the 3 principles related to grouping contracts together

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