The Committee on Property and Casualty Insurance Financial Reporting (PCFRC) has prepared this draft educational note to provide guidance related to the measurement and presentation of risk adjustment for non-financial risk under International Financial Reporting Standard® (IFRS) 17 for property and casualty (P&C) insurers.
This draft educational note is written from the perspective of Canadian actuaries and is not intended to duplicate any other guidance.
This draft educational note is structured in sections as follows:
• Section 1 provides an introduction.
• Section 2 provides guidance related to transitioning from IFRS 4 to IFRS 17.
• Section 3 provides guidance related to general consideration related to risk adjustment for non-financial risk (RA).
• Section 4 provides guidance on estimating RA for insurance contracts issued using quantile methods.
• Section 5 provides guidance on estimating RA for insurance contracts issued using cost of capital method.
• Section 6 provides guidance on estimating RA for insurance contracts issued using margin method.
• Section 7 provides guidance on estimating RA for reinsurance contracts held.
• Section 8 provides guidance on considerations for catastrophe reinsurance.
• Section 9 provides guidance on combining approaches and methods.
• Section 10 provides guidance on quantification of the confidence level.