Document ID: chunk:federal_register_of_legislation:F2021C00205:body:0:p28
Version: federal_register_of_legislation:F2021C00205
Segment Type: other
Provision Reference: 
Character Range: 71918–75207

modified terms of a debt instrument.
financial risk                       The risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract.
guaranteed benefits                  Payments or other benefits to which a particular policyholder or investor has an unconditional right that is not subject to the contractual discretion of the issuer.
guaranteed element                   An obligation to pay guaranteed benefits, included in a contract that contains a discretionary participation feature.
insurance asset                      An insurer's net contractual rights under an insurance contract.
insurance contract                   A contract under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. (See Appendix B for guidance on this definition.)
insurance liability                  An insurer's net contractual obligations under an insurance contract.
insurance risk                       Risk, other than financial risk, transferred from the holder of a contract to the issuer.
insured event                        An uncertain future event that is covered by an insurance contract and creates insurance risk.
insurer                              The party that has an obligation under an insurance contract to compensate a policyholder if an insured event occurs.
liability adequacy test              An assessment of whether the carrying amount of an insurance liability needs to be increased (or the carrying amount of related deferred acquisition costs or related intangible assets decreased), based on a review of future cash flows.
policyholder                         A party that has a right to compensation under an insurance contract if an insured event occurs.
reinsurance assets                   A cedant's net contractual rights under a reinsurance contract.
reinsurance contract                 An insurance contract issued by one insurer (the  reinsurer) to compensate another insurer (the  cedant) for losses on one or more contracts issued by the cedant.
reinsurer                            The party that has an obligation under a reinsurance contract to compensate a cedant if an insured event occurs.
unbundle                             Account for the components of a contract as if they were separate contracts.

Additional Australian defined terms – see Appendix C.

Appendix B
Definition of an insurance contract
This appendix is an integral part of the Standard.
B1 This appendix gives guidance on the definition of an insurance contract in Appendix A. It addresses the following issues:
(a) the term 'uncertain future event' (paragraphs B2–B4);
(b) payments in kind (paragraphs B5–B7);
(c) insurance risk and other risks (paragraphs B8–B17);
(d) examples of insurance contracts (paragraphs B18–B21);
(e) significant insurance risk (paragraphs B22–B28); and
(f) changes in the level of