Page 194 - India Insurance Report 2023- BIMTECH

182 India Insurance Report - Series II

• Spreading the acquisition cost
• More information about the impact of financial and non-financial risk, time value of money and
other estimates

• Discount rates reflecting the characteristics of the insurance contract liability
• New presentation of revenue and service results

1.7. What Actuaries Need to Work On

• Actuarial Policy formulation and decisions
• Finalize the technology requirement and provide business requirement documents to technology
solution teams.
• Data of a more granular nature;

• Actuarial processes, which should be fast and completely integrated;
• Manage the data granularity of each group of contracts while ensuring traceability.
• Prepare data and manage measurement models such as BBA, PAA and VFA to enhance the current
actuarial models to generate Ind AS 117 results.
• Storage of data.
• Generation of Cash Flow and Risk adjustment conditioned to measurement model both initial and
subsequent.

1.8. What Accountants Need to Work on

• Accounting Policy formulation and decisions
• Finalize the technology requirement and provide business requirement documents to the tech solution team.
• Estimate the unearned profit that will be recognized as services are being delivered: the Contractual
Service Margin (CSM).
• Prepare financial disclosures (both general ledger and sub-ledger)
• Produce financial statements and disclosure under Ind AS 117 after enhancing the existing chart of accounts
• Robust internal controls on all assumptions, estimates, and trail for these changes

2. Ind AS 117/ IFRS 17

Under the Ind AS 117/IFRS 17 model, insurance contract liabilities will be calculated as the present
value of future insurance cash flows with a provision for risk. The discount rate will reflect current
interest rates. If the present value of future cash flows would produce a gain at the time a contract is issued,
the model would also require a “contractual service margin” (CSM) to offset the day 1 gain. The CSM
would be amortised over the life of the contract. There would also be a new income statement presentation
for insurance contracts, including a revised definition of revenue and additional disclosure requirements.