locked in yield curve

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in CIA.IFRS17-DR

Locked-in yield curves would be used when:
the entity elects the OCI option (Other Comprehensive Income) for some or all portfolios of insurance contracts

i also see the excel example include column with OCI option and without OCI option. What does the OCI option mean? How much do we need to know about the OCI option?

Thanks

Comments

  • Staff-T1Staff-T1

    OCI stands for other comprehensive income. Basically you can choose to disaggregate insurance finance expense and income in OCI or Profit & Loss. This is known as the "OCI option". In really simple terms: The effect of a change in discount rate can either show up immediately in P&L or in OCI -> It is up to the insurer. Don't think you need to know more than what I just mentioned here

  • mimilau5858mimilau5858

    when will the effect of a change in discount rate be shown in OCI?

  • Staff-T1Staff-T1

    When the insurer selects the OCI option

  • adipelinoadipelino
    edited October 2022

    does the OCI option apply only to PAA or to both? I thought it applied to both but this chart in the IFRS 17 - DR source reading seems to say it doesn't (or at least there's no difference)

    pg. 31 of CIA - Discount Rates

  • Staff-T1Staff-T1

    It applies to both. The difference between OCI and non-OCI is explained further down in the paper in Approach #3

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