IFRS17 Battle Card: What is the formula for LRC
in CIA.IFRS17
Hi,
battle card #13 in full quiz asks for the formula for LRC, the answer is UEP - DAC - premium receivable, I think this is the formula for using PAA method, but not GMA right (GMA: FCF + CSM)
Thanks,
Comments
Yes, that's the formula given in the official IFRS 17 document that I linked to in the wiki for background information. Here's the direct link to that official document:
(There doesn't appear to be much discussion on GMA. In contrast, there is a whole syllabus reading on PAA.)
Hi @graham,
What type of premium receivable can a primary insurer have?
If all premium is not paid up-front, then UEP=Premium receivable
Staggered payments are quite common in the industry. For example, you would usually pay your premium monthly for an annual policy
Thanks for your response.
To re-phrase my question, what is the difference between UEP and Premium Receivable?
Premiums receivable is what is owed from the policyholder but not yet received. UEP is the unearned portion of the premium you have already received from the policyholder