Which of the Following Statements Is Not in Accordance with AASB

question 29

Multiple Choice

Which of the following statements is not in accordance with AASB 1023 General Insurance Contracts when determining the outstanding claims liability?

• A) Premium that has not been recognised in the statement of comprehensive income is premium that is unearned and shall be recognised in the statement of financial position as an unearned premium liability.
• B) The outstanding claims liability may be discounted for the time value of money using government bond rates that match the structure and term of the future obligations.
• C) The expected future payments include: (a) unpaid reported claims; (b) claims incurred but not reported; (c) claims incurred but not enough reported; and (d) acquisition costs.
• D) An outstanding claims liability shall be recognised in respect of direct business and reinsurance business and shall be measured as the central estimate of the present value of the expected future payments for claims incurred with an additional risk margin to allow for the inherent uncertainty in the central estimate.

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