Disclosure - International Financial Reporting Standards


33.13.The insurer is obliged to disclose information that identifies (and explains) the amounts presented in its financial statements arising from insurance contracts, in particular:

• on its accounting policies for insurance contracts and related assets, liabilities, revenues and expenses;

• on the reflected assets and liabilities, income and expenses (and if it submits a statement of cash flows using the "direct" method), cash flows arising from insurance contracts. In addition, if the insurer is the assignor, he must also provide information:

- about the profit (or losses) reflected in the profit and loss account in connection with the conclusion of reinsurance contracts;

- depreciation for the period and residual (unamortized) amounts at the beginning and end of the period, if the assignor amortizes the profit (and losses) arising in connection with the conclusion of reinsurance contracts;

• the effect of changes in the assumptions used to assess insurance assets and insurance liabilities, with a separate indication of the impact of each change that has a material effect on the financial result;

• reconciliation of changes in insurance liabilities, reinsurance assets and (if any) corresponding deferred acquisition costs.

The insurer is obliged to disclose information that helps users to understand the amount, timing and uncertainty factors associated with the movement of cash, including:

• about the objectives in the field of risk management arising from insurance contracts and its policies aimed at reducing the level of such risks;

• about insurance risk (before and after reducing the level of risk through reinsurance), including information:

- about the sensitivity of the financial result and equity to changes in variables that significantly affect these indicators;

- about the concentration of insurance risk, including a description of how management determines concentration, and the general characteristics of each concentration (that is, the type of insurance event, geographic area or currency);

• about actual losses in comparison with earlier made calculations (ie about dynamics of losses). Information on the dynamics of losses should be disclosed retrospectively until the period of the earliest material loss, for which there is currently uncertainty in terms of the volume (and timing) of insurance payments; and there is no need to disclose information for more than 10 years. To fulfill the condition of the need to explain the sensitivity to insurance risk, the insurer must disclose one of two provisions:

is the results of a sensitivity analysis that shows how the change in the corresponding risk variable that would have been possible if they occurred at the balance sheet date would have an impact on the income statement and equity.

- the methods and assumptions used in the preparation of the sensitivity analysis, as well as any changes from the previous period in the methods and assumptions used.

However, if the insurer uses an alternative method to manage sensitivity in a market environment, for example, an embedded value analysis, it can meet this condition by disclosing information on such an alternative sensitivity and disclosure analysis required by IFRS 7 on sensitivity analysis. The organization is not required to disclose the dynamics of losses more than five years before the end of the first financial year in which it first applied this IFRS. In addition, if at the time when the organization first applies this IFRS, it is not possible to prepare information on the dynamics of losses that occurred prior to the first period for which the organization has prepared full comparative information in accordance with this IFRS, the organization is required to disclose this fact .

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