About CSM and FCFs
If CSM = -FCF, why does CSM look so much smaller in this diagram?
also, for non-onerous groups of contracts, does LRC = FCFs + CSM = 0 always?
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If CSM = -FCF, why does CSM look so much smaller in this diagram?
also, for non-onerous groups of contracts, does LRC = FCFs + CSM = 0 always?
Comments
This is because the diagram is probably immediately after the first premium payment has been made.
Yes for non-onerous contracts then LRC = 0 at initial recognition