Description: This article highlights some key points for IFRS 17 Variable fee approach (VFA) and provides an illustrative example on the measurement model logic.

Description: This article highlights some key implications for reinsurance contract held and loss-recovery component IFRS 17.

Description: This article highlights some key implications for reinsurance contracts held.

Description: This article highlights some key points for IFRS 17 Variable fee approach (VFA) and provides an illustrative example on the measurement model logic.

Description: This article aims to delve into the rationale and calculation logic of the variable fee approach (VFA) which is applied to the insurance contracts with direct participation features under IFRS 17. In actual practice, the variable fee approach can be implemented in two methods, which are from fee income or total cash flows point of view. These two methods will achieve the same outcomes but are featured with different insights and varying degree of operational ease. Detailed roll-forward steps of contractual service margin (CSM) for these two methods are elaborated in the article, along with a numerical example by using a variable universal life product to help the readers comprehend the rationale behind the variable fee approach.