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in this situation the implementation guidance states that if the insurance component 599121

Significant insurance risk

Entity A issues a unit-linked contract that pays benefits linked to the fair value of a pool of assets. The benefit is 100% of the unit value on surrender or maturity and 101% of the unit value on death.

In this situation the implementation guidance states that if the insurance component (the additional death benefit of 1%) is not unbundled then the whole contract is an investment contract. The insurance component in this arrangement is insignificant in relation to the whole contract and so would not meet the definition of a insurance contract in IFRS 4. [IFRS 4.IG2 E1.3].

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