Separating components workshop Insurance IFRS Seminar December 1, 2016 Michael Lockerman Session 16

Items to consider for unbundling With single premium payment of a whole life policy, the insurer provided the insured with a box seat at the Happy Valley race course for the first policy year. Seats are good for the first Wednesday in December to April at a cost of HKD 1,000. Premium of HKD 100,000 was paid on 1 July, 2013. Interest rates in Hong Kong have dropped slightly and are now 0% Should this benefit be unbundled? If so, what is the value at the following dates? 1 July 2013 31 Dec 2013 30 June 2014

Items to consider for unbundling Product is a single premium unit-linked life insurance product with either: A fixed death benefit of HKD 1mm A guaranteed minimum death benefit equal to the initial premium paid x 105% A guaranteed minimum death benefit equal to current account value x 105% In any of the above, should the account value be separated for presentation purposes?? Should the account value be unbundled?

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