1. User Guide
  2. Exploring Oracle Insurance Accounting Analyzer Application
  3. Level of Aggregation
  4. Grouping Contracts at Initial Recognition According to Expected Profitability
  5. Onerous Assessment

Onerous Assessment

Onerous assessment includes multiple levels of processing. These include measuring an insurance contract or a set of insurance contracts at initial recognition. If they are found to be onerous, then they are marked as onerous at initial recognition. If not, the assessment to determine which of the following groups, should these contracts or groups of contracts belong to, is performed:

  • Remaining contracts in the portfolio.
  • No significant possibility of becoming onerous at initial recognition.

Facts and circumstances can indicate if the contracts might form an onerous group even before typical initial recognition. This process is known as Early Recognition.

Note:

Contracts can fall into different groups because of legal or regulatory constraints, based on the ability to set different prices or levels of benefit for policyholders with different characteristics. Then under IFRS 17, an entity may include these contracts in the same group, by following all other IFRS 17 grouping requirements.