Exam 6C Practice Question 16
Study guide: Exam 6C
During the year, an insurer's discounted liability for incurred claims (LIC) changes for the following reasons:
| Reason | Change in LIC |
|---|---|
| Unwinding of the discount as time passes | +40 |
| Increase in current discount rates | -70 |
| Adverse development of the undiscounted estimate for prior accident years | +120 |
| Release of risk adjustment as risk expires | -15 |
Calculate the insurance finance income or expenses (IFIE) for the year.
- A) Net insurance finance income of 70
- B) Net insurance finance income of 30
- C) Insurance finance expense of 40
- D) Insurance finance expense of 90
- E) Insurance finance expense of 110
Answer this question and see the worked solution
Concepts tested
- Insurance Finance Income or Expenses
- Liability for Incurred Claims
- IFRS 17 Discount Rates
- Insurance Service Expenses