Page 170 - IC46 addendum

Insurance Contracts

1.20 Catastrophe bond: bond in The contract is an insurance

which principal, interest contract, and contains an insurance

payments or both are reduced component (with the issuer as

significantly if a specified policyholder and the holder as the

triggering event occurs and insurer) and a deposit component.

the triggering event includes (a) If specified conditions are met,

a condition that the issuer of paragraph 10 of the Standard

the bond suffered a loss requires the holder to unbundle

the deposit component and

apply Ind AS 39 to it.

(b) The issuer accounts for the
insurance component as
reinsurance if it uses the bond
for that purpose. If the issuer
does not use the insurance
component as reinsurance, it is
not within the scope of this
Standard, which does not
address accounting by
policyholders for direct
insurance contracts.

(c) Under paragraph 13 of the
Standard, the holder could
continue its existing accounting
for the insurance component,
unless that involves the
practices prohibited by
paragraph 14.

1.21 An insurance contract issued The contract will generally be

by an insurer to a defined eliminated from the financial

benefit pension plan covering statements, which will include:

the employees of the insurer,

or of another entity (a) the full amount of the pension

consolidated within the same obligation under Ind AS 19

financial statements as the Employee Benefits, with no

insurer. deduction for the plan’s rights

under the contract.

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