LRC (under PAA) for a given group of insurance contracts

olidude3121olidude3121
in CIA.IFRS17-LRC

All the calculation problems seen regarding LRC, are calculating the LRC using PAA under year 1. If the question where to calculate the LRC (at the end of year 2) - assuming no other premiums are collected, do we just take the LRC at the end of year 1 (ADD: Amortized Direct Acquisition Cash Flows) & (Subtract: amortized premium that was received at inception)?

Sub-question, if there were another premium collected, would we add the "new" values of amortized premiums and acquisition expenses to the old ones as well?

Thanks! Let me know if anything is not clear :)

Comments

  • Staff-T1Staff-T1

    Yes, that is basically what is said on page 24 of the LRC educational note.
    If it is earned yes. But need to be cognizant if those premiums are from a different cohort (i.e. written in a different CY) then they would be in their "own" LRC group

  • olidude3121olidude3121

    Thank you! so LRC is segments and calculated on a calendar year basis, and then aggregated to get the B/S amount?

  • Staff-T1Staff-T1

    Yeah generally each year is a cohort :)

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