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

2. 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

3. 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?

4. Thank You