Document ID: chunk:federal_register_of_legislation:F2024L00075:reg:38:p9
Version: federal_register_of_legislation:F2024L00075
Segment Type: reg
Provision Reference: reg 38 (pt 9/76)
Character Range: 47494–50761

measuring defined benefit member liabilities at the end of the current period.

Related parties
AG39           A trustee of a superannuation entity is a related party of the entity for the purpose of applying AASB 124.

Insurance arrangements (paragraphs 33 to 36)
AG40           Superannuation entities often have insurance arrangements in place for their members and the extent to which they affect the financial statements varies depending on the nature of those arrangements.  Some superannuation entities act only as agents for external insurers.  Other superannuation entities act in the capacity of insurers and, therefore, take on insurance risks.
AG41           Factors that might be considered in determining whether a superannuation entity is acting as an agent in respect of the insurance arrangements provided to members include:
(a)                   members (or their beneficiaries) will only receive insurance benefits if the external insurer/reinsurer pays claims;
(b)                   insurance premiums are only paid through the superannuation entity for administrative reasons; and
(c)                   insurance premiums are effectively set directly by reference to premiums set by an external insurer.
AG42           It is not necessarily indicative of a superannuation entity taking on the role of an insurer simply because:
(a)                   (group) insurance cover is taken out in the name of the superannuation entity trustee;
(b)                   claim benefits are paid to members (or their beneficiaries) via the superannuation entity; and
(c)                   ex gratia payments have occasionally been made by the trustees in respect of death and disability benefits.

Superannuation entities acting only as agents
AG43           When a superannuation entity is acting only as an agent for an external insurer, premiums are not revenues or expenses of the superannuation entity and do not give rise to insurance contract liabilities or reinsurance assets.  However, the impacts on the financial statements could include:
(a)                   premium cash inflows collected from members and premium cash outflows paid to insurers in the statement of cash flows; and
(b)                   premiums charged to member accounts and insurance benefits paid to members via the superannuation entity in the statement of changes in member benefits.

Superannuation entities as insurers
AG44           When a superannuation entity is taking on the role of an insurer, the impacts on the financial statements could include:
(a)                   insurance contract revenue, incurred claims expense, reinsurance expense and reinsurance recoveries recognised in the income statement;
(b)                   insurance contract liabilities and reinsurance contract assets recognised in the statement of financial position; and
(c)                   insurance contract cash inflows, reinsurance contract cash outflows, claims cash outflows and reinsurance recoveries cash inflows recognised in the statement of cash flows.
AG45           Depending on the conditions set out in the relevant trust deed, defined benefit members or beneficiaries might be promised, for example, a lump sum benefit on retirement or resignation, a lump sum benefit on