LRC Formula
In the MCT calculation, we are given Formula 2c (PAA):
(unexpired coverage for insurance contracts issued) = ( LRC – LC + unamortized insurance acquisition cash flows + unamortized reinsurance commissions + premiums receivable ) x ELR + costs
Is the LRC the same as the LRC in this formula:
LRC = UEP – DAC
Also for the comparison of IFRS 17 vs CIA, under DAC amount:
IFRS 17: allows deferral of DAC that is directly attributable to the portfolio of insurance contracts
CIA: allowable deferral is different
when it says allowable deferral is different, what is exactly is different. Does it mean CIA allows deferral of DAC that is not directly attributable to the portfolio of insurance contracts?
Comments
Yes the LRC is UEP - DAC. I believe that some of the expenses that fall under DAC would be different under IFRS4 based on my experience. The source doesn't go into too much detail besides saying they are different. This would normally fall under the purview of the accountants
Got it.