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IFRS 17 Actuarial Science - Part 2

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 Here we will discuss 3 major questions: 1. What are the benefits of IFRS17? 2. What are the limitations of IFRS 17? 3. Difference between IFRS 17 and IFRS 4? Ques: How IFRS17 adds value to users' financial statements? Ans: Transparency - improves the quality of insurers' financial information Consistency - consistent and high-quality accounting standard for all insurance contracts across most jurisdictions  reduces much of the existing diversity in reporting. increases comparability in financial statements. Better reflection of reality – profit is spread over the contract's life in a series of smaller cash flows – giving more insight into how profit emerges. Beneficial for investors - More informative and granular disclosures provide investors proper insight into the entity's business model, exposures and performance. Transformation - Opportunity for insurers to transform existing business   Ques: Difference between IFRS 4 and IFRS 17? Ans: IFRS 4 IF

Government Sponsored Socially Oriented Insurance Schemes - India

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For the well-being and safeguarding the health and wealth of the citizens of the country, the Government of India has launched various insurance policies. These are as follows: Government Sponsored Socially Oriented Insurance Schemes Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) This policy is for people in the age group of 18 to 50 years having a bank account. The life cover of Rs. 2 lakhs in case of death of the insured, due to any reason is provided for the period of one year from 1 st June to 31 st May and, is renewable. The premium of Rs. 436 per annum is auto-debited from the insured’s bank account on or before 31 st May of each year. This policy is provided by LIC and all other life insurers who are willing to offer the product on similar terms with necessary approvals 𝐒𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐦𝐲 𝐘𝐨𝐮𝐓𝐮𝐛𝐞 𝐂𝐡𝐚𝐧𝐧𝐞𝐥 𝐭𝐨 𝐥𝐞𝐚𝐫𝐧 𝐏𝐲𝐭𝐡𝐨𝐧 𝐚𝐧𝐝 𝐒𝐐𝐋 𝐟𝐨𝐫 𝐀𝐜𝐭𝐮𝐚𝐫𝐢𝐞𝐬 YouTube - Actuary Sense Pradhan Mantri Suraksha Bima Yojana (PMSBY) This policy

Variable Annuity - Part 1

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Define Variable Annuity A variable annuity is a contract between policyholder and an insurance company under which the insurer agrees to make periodic payments to you, beginning either immediately or at some future date. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments. A variable annuity offers a range of investment options. The value of your investment as a variable annuity owner will vary depending on the performance of the investment options you choose. The investment options for a variable annuity are typically mutual funds that invest in stocks, bonds, money market instruments, or some combination of the three How It is Different from Mutual Funds Payment till Lifetime:  Variable annuities let you receive periodic payments for the rest of your life (or the life of your spouse or any other person you designate). This feature offers protection against the possibility that, after you retire, you will outlive your as

IFRS 17 - Actuarial Science - Part 1

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IFRS 17 Insurance Contracts is a new accounting standard that entities are expected to apply for reporting periods beginning on or after 1 January 2023 (though earlier application is permitted). An accounting standard is a common set of principles, standards, and procedures that define the basis of financial accounting policies and practices. It supersedes IFRS 4 Insurance Contracts as it was an interim standard for Insurance Contracts and lacked comparability, transparency, usefulness and qualify of information for insurers and key stakeholders. IFRS17 aims to increase the usefulness, comparability, transparency and quality of insurers financial statements. CSM (Contractual Service Margin) A fundamental concept introduced by IFRS 17 is the contractual service margin (CSM) . The CSM , in most instances, represents the unearned profit that an entity expects to earn as it provides services. IFRS17 is a principles-based standard, so entities must apply significant judgement when determ

Do you know about every Probability Distribution function with cool examples?

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  Probability Distributions:  It is a mathematical formula which helps us to find out the chances of occurring of an event. If we say that our dataset belongs to some particular distribution then we can say that probability of events in such dataset behave in a particular pattern. Say, the dataset is from uniform distribution then each and every event of range will have equal chances of occurring.   Types of distributions: Discrete Distributions:  Distributions defined for discrete random variables (which can take countable values such as 0,1,2,3….) are known as discrete distributions. Following given distributions are discrete: Uniform Distribution:  Data is said to be uniformly distributed if the probability of events is equal.                                               For example : Events in throw of a dice or flipping a coin have equal probabilities.   The number of bouquets sold daily at a flower shop is uniformly distributed with a maximum of 40 and a minimum of 3