Document ID: chunk:federal_register_of_legislation:F2023L00015:reg:8
Version: federal_register_of_legislation:F2023L00015
Segment Type: reg
Provision Reference: reg 8
Character Range: 12662–14622

8                        Paragraphs Aus14.1, Aus16.1 and Aus22.1 are added. Paragraphs 14, 16 and 22 are not amended but are included for reference.

      Level of aggregation of insurance contracts

          14 An entity shall identify portfolios of insurance contracts. A portfolio comprises contracts subject to similar risks and managed together. Contracts within a product line would be expected to have similar risks and hence would be expected to be in the same portfolio if they are managed together. Contracts in different product lines (for example single premium fixed annuities compared with regular term life assurance) would not be expected to have similar risks and hence would be expected to be in different portfolios.

               Aus14.1 For a public sector entity applying the modifications in paragraphs Aus16.1 and Aus22.1, a portfolio of insurance contracts would be the main unit of account, not groups of insurance contracts.

          …

          16 An entity shall divide a portfolio of insurance contracts issued into a minimum of:

               (a) a group of contracts that are onerous at initial recognition, if any;

               (b) a group of contracts that at initial recognition have no significant possibility of becoming onerous subsequently, if any; and

               (c) a group of the remaining contracts in the portfolio, if any.

               Aus16.1 Notwithstanding paragraph 16, a public sector entity is not required to divide a portfolio of insurance contracts based on the minimum groups identified in paragraph 16.

…
          22 An entity shall not include contracts issued more than one year apart in the same group. To achieve this the entity shall, if necessary, further divide the groups described in paragraphs 16–21.

               Aus22.1 Notwithstanding paragraph 22, a public sector entity is not required to divide a portfolio of insurance contracts based on when they are issued.