19 Definitions
19.1
In this Standard:
19.1[1]
attachment date means, for a direct insurer, the date as from which the insurer accepts risk from the insured under an insurance contract or endorsement or, for a reinsurer, the date from which the reinsurer accepts risk from the direct insurer or another reinsurer under a reinsurance arrangement
19.1[2]
cedant means the policyholder under a reinsurance contract
19.1[3]
claim means a demand by any party external to the entity for payment by the insurer on account of an alleged loss resulting from an insured event or events, that have occurred, alleged to be covered by an insurance contract
19.1[4]
claims expense means the charge to the statement of comprehensive income for the reporting period and represents the sum of claims settled and claims management expenses relating to claims incurred in the period and the movement in the gross outstanding claims liability in the period
19.1[5]
claims incurred means claims that have occurred prior to the end of the reporting period, whether reported or unreported at the end of the reporting period
19.1[7]
deposit premium means the premium charged by the insurer at the inception of a contract under which the final premium depends on conditions prevailing over the contract period and so is not determined until the expiry of that period
19.1[8]
direct insurance contract means an insurance contract that is not a reinsurance contract
19.1[9]
fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. (See AASB 13.)
19.1[10]
financial risk means the risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, a credit rating or credit index or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract
19.1[11]
future claims means claims in respect of insured events that are expected to occur in future reporting periods under policies where the attachment date is prior to the end of the reporting period
19.1[12]
general insurance contract means an insurance contract that is not a life insurance contract
19.1[13]
general insurer means an insurer that writes general insurance contracts
19.1[14]
general reinsurance contract means a reinsurance contract that is not a life reinsurance contract
19.1[15]
insurance asset means an insurer’s net contractual rights under an insurance contract
19.1[16]
insurance contract means a contract under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder
(Refer to Appendix for additional guidance in applying this definition.)
19.1[17]
insurance liability means an insurer’s net contractual obligations under an insurance contract
19.1[18]
insurance risk means risk, other than financial risk, transferred from the holder of a contract to the issuer
19.1[19]
insured event means an uncertain future event covered by an insurance contract and creates insurance risk
19.1[20]
insurer means the party that has an obligation under an insurance contract to compensate a policyholder if an insured event occurs
19.1[21]
inwards reinsurance means reinsurance contracts written by reinsurers
19.1[22]
liability adequacy test means an assessment of whether the carrying amount of an insurance liability needs to be increased (or the carrying amount of the related deferred acquisition costs or related intangible assets decreased) based on a review of future cash flows
19.1[23]
life insurance contract means an insurance contract, or a financial instrument with a discretionary participation feature, regulated under the Life Insurance Act 1995, and similar contracts issued by entities operating outside Australia
19.1[24]
life reinsurance contract means a life insurance contract issued by one insurer (the reinsurer) to compensate another insurer (the cedant) for losses on one or more contracts issued by the cedant
19.1[25]
net claims incurred means direct claims costs net of reinsurance and other recoveries, and indirect claims handling costs, determined on a discounted basis
19.1[26]
non-insurance contract means a contract regulated under the Insurance Act 1973, and similar contracts issued by entities operating outside Australia, which fails to meet the definition of an insurance contract under this Standard
(An example of a non-insurance contract might be a type of complex financial reinsurance contract.)
19.1[27]
outstanding claims liability means all unpaid claims and related claims handling expenses relating to claims incurred prior to the end of the reporting period
19.1[28]
policyholder means a party that has a right to compensation under an insurance contract if an insured event occurs
19.1[29]
premium means the amount charged in relation to accepting risk from the insured, but does not include amounts collected on behalf of third parties
19.1[30]
reinsurance assets means a cedant’s net contractual rights under a reinsurance contract
19.1[31]
reinsurance contract means an insurance contract issued by one insurer (the reinsurer) to compensate another insurer (the cedant) for losses on one or more contracts issued by the cedant
19.1[32]
reinsurer means the party that has an obligation under a reinsurance contract to compensate a cedant if an insured event occurs
19.1[33]
separate financial statements are those presented by a parent, an investor in an associate or a venturer in a joint venture, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees
19.1[34]
unbundle means to treat the components of a contract as if they were separate contracts
19.1[35]
weather derivative means a contract that requires payment based on climatic, geological or other physical variables