PFRS 4

Question 1

A contractual component not accounted for as a derivative under IAS 39 and would be within the scope of IAS 39 if it were a separate instrument

Answer 1

Deposit component

Question 2

An insurance contract that is not a reinsurance contract

Answer 2

Direct insurance contract

Question 3

The amount for which an asset could be exchanged, or a liability settled, between knowledgable, willing parties on an arm’s length transaction

Answer 3

Fair value

Question 4

A contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the original or modified term of a debt instrument

Answer 4

Financial guarantee contract

Question 5

The risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, etc, provided in the case of a non financial variable that the variable is not specific to a party to the contract

Answer 5

Financial risk

Question 6

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

Answer 6

Guaranteed benefits

Question 7

An obligation to pay the guaranteed benefits, including in a contact that contains a discretionary participating feature

Answer 7

Guaranteed element

Question 8

An issuer’s contractual rights under the insurance contract

Answer 8

Insurance assets

Question 9

A contract under which one party accepts significant insurance risk from another party by agreeing to compensate the policyholder if specified uncertain event adversely affects the policyholder.

Answer 9

Insurance contract

Question 10

Insurance contract is composed of 3 terms

Answer 10

Insurer
Policyholder
Insured event

Question 11

An insurer’s net obligation in an insurance contract

Answer 11

Insurance liability

Question 12

Risk transferred for the holder of an a contract to the issuer

Answer 12

Insurance risk

Question 13

An uncertain future event that is covered by an insurance contact and creates insurance risk

Answer 13

Insured event

Question 14

The party that has the obligation under the insurance contract to compensate a policyholder if an insured event occurs

Answer 14

Insurer

Question 15

An assessment whether the carrying amount of an insurance liability needs to be increased (or carrying amount of related deferred acquisition cost or related intangible assets decreased) based on review of future cash flow

Answer 15

Liability adequacy test

Question 16

A party that has the right to compensation under the insurance contract if the insured event occurs

Answer 16

Policyholder

Question 17

A contract issued by one insurer to compensate another insurer for the losses on one or more contacts issued by the Cedant

Answer 17

Reinsurance contract

Question 18

Account for the components of a contract as if they were separate

Answer 18

Unbundle

Question 19

The policyholder under a reinsurance contract

Answer 19

Cedant