The Committee on Life Insurance Financial Reporting (CLIFR) has prepared this explanatory report to provide information concerning the application of discount rates used in accordance with IFRS 17 requirements.
This explanatory report is structured into seven sections. The first section introduces the content presented in this report. The second section lays out terminology used throughout the report. The third section presents considerations related to the use of the locked-in yield curve under the general measurement approach under IFRS 17. The fourth section discusses setting the discount rates for reinsurance contracts held and whether it is appropriate to use the same discount rates as are used for the underlying direct contracts. The fifth section discusses how considerations laid out in sections three and four would apply to the risk adjustment for non-financial risk. The sixth and seventh sections discuss the presentation of the finance income or expenses in the financial statements.