Page 180 - IC46 addendum

Insurance Contracts

returns available to the contingent to a

policyholder as either significant extent on

(a) a cash payment, survival, the option to
take the life-contingent
(b) a period-certain annuity does not
annuity or
transfer insurance risk

(c) a life-contingent until the policyholder
annuity, at annuity opts to take the annuity.
rates prevailing at Therefore, the

the date of embedded guarantee is
not an insurance
annuitisation.
contract and is not

closely related to the

host insurance contract.

Fair value measurement

is required.

If the guaranteed

payments are

contingent to a

significant extent on

survival, the guarantee

is an insurance contract

(similar to a pure

endowment). Fair value

measurement is not

required (but not

prohibited).

2.11 Embedded guarantee The whole contract is Not applicable.

of minimum equity an insurance contract

returns available to the from inception (unless

policyholder as either the life-contingent

(a) a cash payment payments are

insignificant). The

(b) a period-certain option to take the life-

annuity or contingent annuity is an

(c) a life-contingent embedded insurance
annuity, at annuity contract, so fair value
rates set at measurement is not
inception. required (but not
prohibited).

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