Document ID: chunk:federal_register_of_legislation:F2023C00382:front:0:p38
Version: federal_register_of_legislation:F2023C00382
Segment Type: other
Provision Reference: 
Character Range: 100393–103615

obligations that relate to future provision of insurance contract services); or
                                                                         (ii) any investment components or other amounts that are not related to the provision of insurance contract services and that have not been transferred to the liability for incurred claims.
policyholder                                                   A party that has a right to compensation under an insurance contract if an insured event occurs.
portfolio of insurance contracts                               Insurance contracts subject to similar risks and managed together.
reinsurance contract                                           An insurance contract issued by one entity (the reinsurer) to compensate another entity for claims arising from one or more insurance contracts issued by that other entity (underlying contracts).
risk adjustment for non-financial risk                         The compensation an entity requires for bearing the uncertainty about the amount and timing of the cash flows that arises from non-financial risk as the entity fulfils insurance contracts.
underlying items                                               Items that determine some of the amounts payable to a policyholder. Underlying items can comprise any items; for example, a reference portfolio of assets, the net assets of the entity, or a specified subset of the net assets of the entity.

Appendix B
Application guidance
This appendix is an integral part of AASB 17 Insurance Contracts.
B1 This appendix provides guidance on the following:
(a) definition of an insurance contract (see paragraphs B2–B30);
(b) separation of components from an insurance contract (see paragraphs B31–B35);
(ba) asset for insurance acquisition cash flows (see paragraphs B35A–B35D);
(c) measurement (see paragraphs B36–B119F);
(d) insurance revenue (see paragraphs B120–B127);
(e) insurance finance income or expenses (see paragraphs B128–B136); and
(f) interim financial statements (see paragraph B137).

Definition of an insurance contract (Appendix A)
B2 This section provides guidance on the definition of an insurance contract as specified in Appendix A. It addresses the following:
(a) uncertain future event (see paragraphs B3–B5);
(b) payments in kind (see paragraph B6);
(c) the distinction between insurance risk and other risks (see paragraphs B7–B16);
(d) significant insurance risk (see paragraphs B17–B23);
(e) changes in the level of insurance risk (see paragraphs B24–B25); and
(f) examples of insurance contracts (see paragraphs B26–B30).

Uncertain future event
B3 Uncertainty (or risk) is the essence of an insurance contract. Accordingly, at least one of the following is uncertain at the inception of an insurance contract:
(a) the probability of an insured event occurring;
(b) when the insured event will occur; or
(c) how much the entity will need to pay if the insured event occurs.
B4 In some insurance contracts, the insured event is the discovery of a loss during the term of the contract, even if that loss arises from an event that occurred before the inception of the contract. In other insurance contracts, the insured event is an event that occurs