Significant insurance risk - 1% Death Benefit IFRS 17

[Zu17]

Dear All,

I have a scenario where, an insurance companies issues unit-linked products whereby if the contract matures, the policyholder gets 100% of the fund value however if the policyholder dies, the policy holder gets 1% death benefit free of charge.

Throughout the policy life, management fees of 2.5% is charged per annum.

When the policyholder gives the premium, the amounts invested is the asset of the Company. The customer choses where to invest the funds, however, the insurer can at its discretion decide not to go forward with the policyholder’s choice.

My question is:
1. Can we say there is transfer of significant insurance risk?
2. If yes, why? and how to account.

Thanks!

[Marek Muc]

Unfortunately, we don't have insurance experts in our Community.

[Zu17]

Hi Marek

It’s okay. Thanks for letting me know!