C - CIA Disclosure

Question 1

CIA Disclosure

2 primary implications of IFRS4 for a PC insurer

Answer 1

1) classification of insurance contract

2) enhanced disclosure in financial statement (subject of CIA disclosure article)

Question 2

CIA Disclosure

2 types of disclosure regarding Annual statements that have to be done.

Answer 2

1) disclose info that
IDENTIFY AND EXPLAIN THE AMOUNTS (qualitative) in financial statement

2) disclose info that
ENABLE USERS TO EVALUATE THE NATURE AND EXTENT OF RISK

Question 3

CIA Disclosure

5 disclosures
IDENTIFYING AND EXPLAINING THE AMOUNTS

Answer 3

1) description of classification of contract and accounting policies
2) recognized A/LI/E
3) assumptions having greatest effect on A/LI/E (quantified)
4) effect of chg in assumptions, showing separately chg having material effect
5) reconciliation of chg in policy liabilities, reinsurance assets and DACs (from one year to the next)

Question 4

CIA Disclosure

3 disclosures

ENABLING USERS TO EVALUATE NATURE AND EXTENT OF RISKS

Answer 4

1) description of primary risks (financial and non-financial) and techniques to manage these

2) info on INSURANCE RISK
- -sensitivity analysis (qualitative OR quantitative)
- -concentration (how mgmt determine concentration, shared characteristic in concentration)
- -claim development

3) info on CREDIT, LIQUIDITY and MARKET risk

Question 5

CIA Disclosure

2 requirements regarding disclosure of concentration of insurance risk

3 considerations when determining the concentration risk of an insurance company

Answer 5

1) how mgmt determines concentration
2) shared characteristics that identifies concentration

diversification
UW limit
reinsurance

Question 6

CIA Disclosure

disclosure required for following risks

credit risk
liquidity risk
market risk
currency risk

Answer 6

–credit risk–
uncollectibility of reinsurance

–liquidity risk–
availability of assets required to meet timing of CF

–market risk–
from selected discount rate

–currency risk–
if claims are paid are reserved in multiple currencies

Question 7

CIA Disclosure

2 disclosure requirements in sensitivity analysis for insurance risk

Answer 7

methods and assumptions used in preparing sensitivity analysis and YoY changes

material effect on the amount, timing and uncertainty of future CF