IFRS 17 Insurance contracts is an international accounting standard which sets out principles forthe recognition, measurement, presentation and disclosures of insurance contracts. IFRS 17 replaces IFRS 4 standard.

In this paper the main requirements of IFRS 17 are presented. It is also discussed how the principles differ from current FIN-GAAP principles. Paper is written on a life insurer’s perspective and focus is on general measurement model (GMM). Very simple examples are given to help understanding the requirements.

First a high level introduction to accounting requirements in Finland are given. Secondly, the insurance contracts liabilities (ICL) are discussed including all relevant components such as liability for remaining coverage (LRC), liability for incurred claims (LIC), present value of future cash flows (PVCF), risk adjustment (RA), contractual service margin (CSM) and loss component (LC). Thirdly, the relevant presentation requirements and related accounting entries are presented.

The paper includes two larger GMM examples to give more deep understanding of IFRS 17 presentation requirements. Also, high level mathematical presentation is given to reason the items of insurance revenue and insurance service result.

This paper is written as learning material for Finnish actuarial exams.

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