Acquired Contracts

Acquired Insurance Contracts and Reinsurance held contracts in a business are treated as if they had been issued by the acquirer at the date of the transaction. The groups of contracts acquired are identified based on the level of aggregation requirements. This determines the issued CSM for Insurance Contracts and Reinsurance held contracts at the date of the transaction. For Onerous Contracts, the difference between the consideration received or paid and the fulfillment cash flows are treated differently. The application comes with the box logic, configured in the Calculation Preference Acquired Contracts templates to estimate the CSM and the loss as on the Transaction Date for the acquired business.

The groups of contracts acquired are identified based on the level of aggregation requirements. This determines the issued CSM for Insurance Contracts and Reinsurance held contracts at the date of the transaction.

Any consideration received for the contracts is used as a proxy for premiums received. This excludes any consideration for other assets and liabilities that are acquired in the same transaction.

For contracts acquired in a business combination, the Fair Value at the Transaction Date is considered. This Fair Value is determined by using the IFRS 13 requirements, except for the requirement where the Fair Value of a financial liability with a demand feature must not be less than the amount payable on demand.

For Onerous Contracts, the difference between the consideration received or paid and the fulfillment cash flows are treated differently.