19Definitions

19 Definitions 19.1 In this Standard: attachment date means, for a direct insurer, the date as from which the insurer accepts risk from the insured under an insurance contract or endorsement or, for a reinsurer, the date from which the reinsurer accepts risk from the direct insurer or another reinsurer under a reinsurance arrangement cedant means the policyholder under a reinsurance contract claim means a demand by any party external to the entity for payment by the insurer on account of an alleged loss resulting from an insured event or events, that have occurred, alleged to be covered by an insurance contract claims expense means the charge to the statement of comprehensive income for the reporting period and represents the sum of claims settled and claims management expenses relating to claims incurred in the period and the movement in the gross outstanding claims liability in the period claims incurred means claims that have occurred prior to the end of the reporting period, whether reported or unreported at the end of the reporting period deposit component means a contractual component that is not accounted for as a derivative under AASB 9 Financial Instruments and would be within the scope of AASB 9 if it were a separate instrument deposit premium means the premium charged by the insurer at the inception of a contract under which the final premium depends on conditions prevailing over the contract period and so is not determined until the expiry of that period direct insurance contract means an insurance contract that is not a reinsurance contract fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. (See AASB 13.) financial risk means the risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, a credit rating or credit index or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract future claims means claims in respect of insured events that are expected to occur in future reporting periods under policies where the attachment date is prior to the end of the reporting period general insurance contract means an insurance contract that is not a life insurance contract general insurer means an insurer that writes general insurance contracts general reinsurance contract means a reinsurance contract that is not a life reinsurance contract insurance asset means an insurer’s net contractual rights under an insurance contract insurance contract means a contract under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder (Refer to Appendix for additional guidance in applying this definition.) insurance liability means an insurer’s net contractual obligations under an insurance contract insurance risk means risk, other than financial risk, transferred from the holder of a contract to the issuer insured event means an uncertain future event covered by an insurance contract and creates insurance risk insurer means the party that has an obligation under an insurance contract to compensate a policyholder if an insured event occurs inwards reinsurance means reinsurance contracts written by reinsurers liability adequacy test means an assessment of whether the carrying amount of an insurance liability needs to be increased (or the carrying amount of the related deferred acquisition costs or related intangible assets decreased) based on a review of future cash flows life insurance contract means an insurance contract, or a financial instrument with a discretionary participation feature, regulated under the Life Insurance Act 1995, and similar contracts issued by entities operating outside Australia life reinsurance contract means a life insurance contract issued by one insurer (the reinsurer) to compensate another insurer (the cedant) for losses on one or more contracts issued by the cedant net claims incurred means direct claims costs net of reinsurance and other recoveries, and indirect claims handling costs, determined on a discounted basis non-insurance contract means a contract regulated under the Insurance Act 1973, and similar contracts issued by entities operating outside Australia, which fails to meet the definition of an insurance contract under this Standard (An example of a non-insurance contract might be a type of complex financial reinsurance contract.) outstanding claims liability means all unpaid claims and related claims handling expenses relating to claims incurred prior to the end of the reporting period policyholder means a party that has a right to compensation under an insurance contract if an insured event occurs premium means the amount charged in relation to accepting risk from the insured, but does not include amounts collected on behalf of third parties reinsurance assets means a cedant’s net contractual rights under a reinsurance contract reinsurance contract means an insurance contract issued by one insurer (the reinsurer) to compensate another insurer (the cedant) for losses on one or more contracts issued by the cedant reinsurer means the party that has an obligation under a reinsurance contract to compensate a cedant if an insured event occurs separate financial statements are those presented by a parent, an investor in an associate or a venturer in a joint venture, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees unbundle means to treat the components of a contract as if they were separate contracts weather derivative means a contract that requires payment based on climatic, geological or other physical variables 19.2 The following terms are defined in AASB 9 or AASB 132 and are used in this Standard with the meaning specified in those Standards: (a) financial asset; (b) financial guarantee contract; (c) financial instrument; and (d) financial liability. ## Accounting Standard AASB 1023 General In Accounting Standard AASB 1023 General Insurance Contracts (as amended) ## Accounting Standard AASB 1023 General Insurance Contracts (as amended) This compiled Standard applies to annual reporting periods beginning on or after 1 January 2023 but before 1 July 2026. It takes into account amendments up to and including 15 December 2022 and was prepared on 6 February 2023 by the staff of the Australian Accounting Standards Board (AASB). This compilation is not a separate Accounting Standard made by the AASB. Instead, it is a representation of AASB 1023 (July 2004) as amended by other Accounting Standards, which are listed in the table below. Table of Standards | Standard | Date made | FRL identifier | Commence-ment date | Effective date(annual periods… on or after …) | Application, saving or transitional provisions | | ------------ | ----------- | -------------- | ------------------ | ---------------------------------------------------- | ---------------------------------------------- | | AASB 1023 | 15 Jul 2004 | F2005B01401 | 24 May 2005 | (beginning) 1 Jan 2005 |  | | AASB 2005-2 | 3 Jun 2005 | F2005L01699 | 30 Jun 2005 | (beginning) 1 Jan 2005 |  | | AASB 2005-4 | 9 Jun 2005 | F2005L01708 | 30 Jun 2005 | (beginning) 1 Jan 2006 | see (a) below | | AASB 2005-9 | 6 Sep 2005 | F2005L03009 | 7 Oct 2005 | (beginning) 1 Jan 2006 | see (a) below | | AASB 2005-10 | 5 Sep 2005 | F2005L02840 | 27 Sep 2005 | (beginning) 1 Jan 2007 | see (b) below | | AASB 2005-12 | 8 Dec 2005 | F2005L04207 | 24 Dec 2005 | (ending) 31 Dec 2005 | see (c) below | | AASB 2007-3 | 26 Feb 2007 | F2007L00551 | 8 Mar 2007 | (beginning) 1 Jan 2009 | see (d) below | | AASB 2007-4 | 30 Apr 2007 | F2007L01669 | 16 Jun 2007 | (beginning) 1 Jul 2007 | see (e) below | | AASB 2007-8 | 24 Sep 2007 | F2007L04130 | 26 Oct 2007 | (beginning) 1 Jan 2009 | see (f) below | | AASB 2007-10 | 13 Dec 2007 | F2008L04269 | 29 Oct 2008 | (beginning) 1 Jan 2009 | see (f) below | | AASB 2008-5 | 24 Jul 2008 | F2008L03030 | 16 Aug 2008 | (beginning) 1 Jan 2009 | see (g) below | | AASB 2009-2 | 22 Apr 2009 | F2009L01638 | 9 May 2009 | (beginning) 1 Jan 2009and (ending) 30 Apr 2009 | see (h) below | | AASB 2009-6 | 25 Jun 2009 | F2009L02729 | 17 Jul 2009 | (beginning) 1 Jan 2009and (ending) 30 Jun 2009 | see (i) below | | Erratum | 5 Oct 2009 | | | (beginning) 1 Jan 2009and (ending) 30 Jun 2009 | see (j) below | | AASB 2009-11 | 7 Dec 2009 | F2009L04690 | 23 Dec 2009 | (beginning) 1 Jan 2018 | see (k) below | | AASB 2009-12 | 15 Dec 2009 | F2009L04669 | 23 Dec 2009 | (beginning) 1 Jan 2011 | see (l) below | | AASB 2010-5 | 27 Oct 2010 | F2010L03081 | 25 Nov 2010 | (beginning) 1 Jan 2011 | see (l) below | | AASB 2010-7 | 6 Dec 2010 | F2011L00315 | 1 Mar 2011 | (beginning) 1 Jan 2018 | see (m) below | | AASB 2011-7 | 29 Aug 2011 | F2011L02017 | 5 Oct 2011 | (beginning) 1 Jan 2013 | see (n) below | | AASB 2011-8 | 2 Sep 2011 | F2011L02038 | 8 Oct 2011 | (beginning) 1 Jan 2013 | see (o) below | | AASB 2012-10 | 18 Dec 2012 | F2013L00080 | 23 Jan 2013 | (beginning) 1 Jan 2013 | see (p) below | | AASB 2013-9 | 20 Dec 2013 | F2014L00370 | 1 Apr 2014 | Pt A (ending) 20 Dec 2013Pt B (beginning) 1 Jan 2014 | see (q) belowsee (r) below | | AASB 2014-5 | 12 Dec 2014 | F2015L00107 | 12 Dec 2014 | (beginning) 1 Jan 2018 | see (s) below | | AASB 2014-7 | 17 Dec 2014 | F2015L00135 | 17 Dec 2014 | (beginning) 1 Jan 2018 | see (t) below | | AASB 2015-8 | 22 Oct 2015 | F2015L01840 | 31 Dec 2016 | (beginning) 1 Jan 2017 | see (u) below | | AASB 16 | 23 Feb 2016 | F2016L00233 | 31 Dec 2018 | (beginning) 1 Jan 2019 | see (v) below | | AASB 2016-7 | 9 Dec 2016 | F2017L00043 | 31 Dec 2016 | (beginning) 1 Jan 2017 | see (w) below | | AASB 17 | 19 Jul 2017 | F2017L01184 | 31 Dec 2022 | (beginning) 1 Jan 2023 | see (x) below | | AASB 2017-5 | 12 Dec 2017 | F2018L00067 | 31 Dec 2017 | (beginning) 1 Jan 2018 | see (y) below | | AASB 2019-1 | 21 May 2019 | F2019L00966 | 31 Dec 2019 | (beginning) 1 Jan 2020 | see (z) below | | AASB 2021-7 | 20 Dec 2021 | F2021L01883 | 31 Dec 2021 | (beginning) 1 Jan 2022 | see (aa) below | (a) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2006. (b) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2007. (c) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 that end before 31 December 2005. (d) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009, provided that AASB 8 Operating Segments is also applied to such periods. (e) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 July 2007. (f) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009, provided that AASB 101 Presentation of Financial Statements (September 2007) is also applied to such periods. (g) Entities may elect to apply this Standard, or its amendments to individual Standards, to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009. (h) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009 and to annual reporting periods beginning on or after 1 January 2009 that end before 30 April 2009. (i) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009, provided that AASB 101 Presentation of Financial Statements (September 2007) is also applied to such periods, and to annual reporting periods beginning on or after 1 January 2009 that end before 30 June 2009. (j) Entities may elect to apply this Erratum to annual reporting periods beginning on or after 1 January 2005, provided that AASB 2009-6 Amendments to Australian Accounting Standards is also applied to such periods. (k) AASB 2009-11 has been amended by AASB 2010-10 (made 31 December 2010) and AASB 2012-6 (made 10 September 2012). AASB 2014-1 deferred the amendments set out in AASB 2009-11 to annual reporting periods beginning on or after 1 January 2018. Entities may elect to apply this Standard to annual reporting periods ending on or after 31 December 2009 that begin before 1 January 2018, provided that AASB 9 (2009) Financial Instruments is also applied to such periods. (l) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2011. (m) AASB 2010-7 has been amended by AASB 2010-10 (made 31 December 2010) and AASB 2012-6 (made 10 September 2012). AASB 2014-1 deferred the amendments set out in AASB 2010-7 to annual reporting periods beginning on or after 1 January 2018. Entities may elect to apply this Standard as set out in paragraph 6 of AASB 2010-7. (n) AASB 2011-7 has been amended by AASB 2012-6 (made 10 September 2012) and AASB 2012-10 (made 18 December 2012). For-profit entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013. The Standard applies for not-for-profit entities to annual reporting periods beginning on or after 1 January 2014. Not-for-profit entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2013 but before 1 January 2014. If an entity elects to apply this Standard to such annual reporting periods, it shall also apply AASB 10 Consolidated Financial Statements and associated Standards to such periods. (o) AASB 2011-8 has been amended by AASB 2011-10 (made 5 September 2011) and AASB 2012-6 (made 10 September 2012). Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013, provided that AASB 13 Fair Value Measurement is also applied to such periods. (p) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013. (q) Entities may elect to apply Part A of this Standard to annual reporting periods beginning on or after 1 January 2005 that end before 20 December 2013, provided that AASB CF 2013-1 Amendments to the Australian Conceptual Framework and AASB 1048 Interpretation of Standards (December 2013) are also applied to such periods. (r) Early application of Part B of this Standard is not permitted. (s) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2018, provided that AASB 15 Revenue from Contracts with Customers is also applied to such periods. AASB 2015-8 updated the application date of the amendments in this Standard (and of AASB 15) to 1 January 2018. (t) Entities may elect to apply this Standard to annual reporting periods beginning after 24 July 2014 but before 1 January 2018, provided that AASB 9 Financial Instruments (2014) is also applied to such periods. (u) The amendments made by AASB 2014-5 are no longer required to apply to annual reporting periods beginning on or after 1 January 2017 but before 1 January 2018, as a consequence of AASB 2015-8 deferring the effective date of AASB 15 (and its consequential amendments in AASB 2014-5) from 1 January 2017 to 1 January 2018. (v) Entities may elect to apply this Standard to annual periods beginning before 1 January 2019, provided that AASB 15 is also applied to the same period. (w) AASB 2016-7 deferred the effective date of AASB 15 (and its consequential amendments in AASB 2014-5) for not-for-profit entities to annual reporting periods beginning on or after 1 January 2019, instead of 1 January 2018. However, earlier application of AASB 1023 (2015) incorporating the text that relates to AASB 15 is permitted, provided that AASB 15 is also applied. (x) Entities may elect to apply this Standard to annual periods beginning before 1 January 2023, provided that AASB 9 Financial Instruments is also applied on or before the date of initial application of AASB 17. (AASB 17 was amended prior to its mandatory application by various amending Standards, including AASB 2022-8 Amendments to Australian Accounting Standards – Insurance Contracts: Consequential Amendments, made by the AASB on 15 December 2022.) AASB 17 has also been amended by AASB 2022-9 Amendments to Australian Accounting Standards – Insurance Contracts in the Public Sector (made on 15 December 2022) to supersede and repeal AASB 1023 for annual periods beginning on or after 1 July 2026. (y) Entities may elect to apply this Standard to annual periods beginning before 1 January 2018. (z) Entities may elect to apply this Standard to annual periods beginning before 1 January 2020. (aa) Entities may elect to apply this Standard to annual periods beginning before 1 January 2022. Table of amendments | Paragraph affected | How affected | By … [paragraph/page] | | ---------------------------- | ------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | | 1.1 | amendeddeleted | AASB 17 [page 82]AASB 2021-7 [39] | | AusCF1 | added | AASB 2019-1 [page 24] | | 1.4 | deleted | AASB 2013-9B [37, 38] | | 1.4.1 | deleted | AASB 2013-9B [40] | | 2.2 | amendedamendedamendedamendedamendedamended | AASB 2005-9 [12, 25]AASB 2007-4 [104]AASB 2010-7 [57]AASB 2014-5 [41]AASB 2017-5 [27]AASB 16 [page 61] | | 2.3.1 | amendedamended | AASB 2009-11 [54]AASB 2010-7 [7, 57] | | 2.3.2 | amended | AASB 2010-7 [56] | | 2.4.4 | amended | AASB 2010-7 [56] | | 4.2.5 | amended | AASB 2009-12 [19] | | 4.4.8 | amended | AASB 2009-12 [19] | | 4.5.2 | amendedamended | AASB 2007-10 [95]AASB 2009-12 [19] | | 5.1.10 | amended | AASB 2005-2 [7] | | 5.2.4 | amended | AASB 2009-12 [19] | | 6.1.3 | amended | Erratum, Oct 2009 [6] | | 9.1 | amended | AASB 2005-2 [8] | | 9.1.1 | deleted | AASB 2005-2 [9] | | 9.1.2 | renumbered as 9.1.1added | AASB 2005-2 [10]AASB 2005-2 [11] | | 9.1.5 | amended | AASB 2005-2 [12] | | 13.3.1 | amended | AASB 2007-4 [104] | | 15.2 | amendedamendedamended | AASB 2005-4 [21]AASB 2009-11 [53]AASB 2010-7 [7, 56] | | 15.2.1 | amendedamendedamendedamended | AASB 2005-4 [21]AASB 2009-11 [54]AASB 2010-7 [7, 57]AASB 2014-7 [55] | | 15.2.2 | amendedamendedamendedamended | AASB 2005-4 [22]AASB 2009-11 [54]AASB 2010-7 [7, 57]AASB 2014-7 [55] | | 15.3 | amended | AASB 2011-8 [103] | | 15.4.1-15.4.2 | deleted | AASB 2012-10 [66] | | 15.5 | amendedamendedamendedamendedamendedamendedamended | AASB 2005-4 [23]AASB 2005-12 [14]AASB 2007-4 [104]AASB 2008-5 [79]AASB 2009-11 [53]AASB 2010-7 [7, 56]AASB 2011-7 [53, A13] | | 15.5.1 | amendedamendedamended | AASB 2009-11 [53]AASB 2010-7 [7, 56]AASB 2011-7 [54, A14] | | 15.5.2 | amendedamendedamendedamendedamended | AASB 2005-4 [24]AASB 2008-5 [79]AASB 2009-11 [53]AASB 2010-7 [7, 56]AASB 2011-7 [54, A14] | | 15.5.3 | deleted | AASB 2005-12 [15] | | 16.1 | amendedamendedamended | AASB 2005-4 [25]AASB 2009-11 [54]AASB 2010-7 [7, 56] | | 16.1.1 | amendedamendedamended | AASB 2005-4 [25]AASB 2009-11 [54]AASB 2010-7 [7, 57] | | 16.1.2 | addedaddedamended | AASB 2009-11 [54]AASB 2010-7 [7, 57]AASB 2014-7 [55] | | 16.1.3 | addedadded | AASB 2009-11 [54]AASB 2010-7 [7, 57] | | 17.1(a), (b) & (c) | deleted | AASB 2005-2 [13] | | 17.1(d) | renumbered as 17.1(a) | AASB 2005-2 [14] | | 17.1(e) | renumbered as 17.1(b) | AASB 2005-2 [15] | | 17.1(f) | amendedrenumbered as 17.1(c) | AASB 2005-2 [16] | | 17.2 | amendedamended | AASB 2005-2 [17]AASB 2007-4 [104] | | 17.5 (and preceding heading) | deleted | AASB 2007-3 [17] | | 17.5.1 | deleted | AASB 2007-3 [17] | | 17.6.4 | amended | AASB 2013-9A [30]AASB 2019-1 [page 25] | | AusCF17.6.4 | added | AASB 2019-1 [page 25] | | 17.7 (and preceding heading) | amended | AASB 2005-10 [41] | | 17.7.1 | amendedamended | AASB 2005-10 [41]AASB 2009-2 [13] | | 17.7.3 | amended | AASB 2005-10 [42] | | 17.7.4 | amended | AASB 2009-6 [100] | | 17.7.5 | added | AASB 2005-10 [43] | | 17.8 (and preceding heading) | addedamended | AASB 2005-2 [18]AASB 2007-4 [104] | | 17.8.1 | renumbered as 17.9.1 | AASB 2005-2 [19] | | 17.9.1 | amended | AASB 2005-10 [44] | | 18.3 | amended | AASB 2005-10 [45] | | 18.4 | addeddeleted | AASB 2009-11 [54]AASB 2010-7 [7, 57] | | 18.5 | addeddeleted | AASB 2010-7 [57]AASB 2014-7 [55] | | 19.1 | amendedamendedamendedamendedamended | AASB 2007-4 [103,104]AASB 2010-5 [61]AASB 2010-7 [57]AASB 2011-8 [12]AASB 2021-7 [40] | | 19.2 | addedamended | AASB 2010-5 [62]AASB 2014-7 [55] | | Appendix, 1 | amended | AASB 2010-5 [63] | | Appendix, 8 | amended | AASB 2010-5 [63] | | Appendix, 17 | amendedamendedamended | AASB 2005-9 [13, 25]AASB 2010-7 [56]AASB 2014-5 [42] | | Appendix, 18 | amendedamendedamended | AASB 2005-9 [14]AASB 2009-11 [55]AASB 2010-7 [7, 56] | | Appendix, 19 | amendedamended | AASB 2009-11 [55]AASB 2010-7 [7, 56] | | Appendix, 20 | amended | AASB 2014-5 [42] | ## General terminology amendments General terminology amendments #### General terminology amendments The following amendments are not shown in the above Table of amendments: References to ‘financial report(s)’ were amended to ‘financial statements’ by AASB 2007-8 and AASB 2007-10, except in relation to specific Corporations Act references and interim financial reports. References to ‘income statement’ and ‘balance sheet’ were amended to ‘statement of comprehensive income’ and ‘statement of financial position’ respectively by AASB 2007-8. References to ‘reporting date’ and ‘each reporting date’ were amended to ‘end of the reporting period’ and ‘the end of each reporting period’ respectively by AASB 2007-8.